Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

BERKSHIRE BILL [Lords] (By Order)

Order for Second Reading read.

To be read a Second time tomorrow.

EAST LOTHIAN DISTRICT COUNCIL (MUSSELBURGH LINKS, ETC.) ORDER CONFIRMATION BILL

SHETLAND ISLANDS COUNCIL ORDER CONFIRMATION BILL

Read the Third time, and passed.

Oral Answers to Questions — SCOTLAND

Football Grounds (Safety)

Mr. McQuarrie: asked the Secretary of State for Scotland what recent discussions he has had with the Scottish Football Association, and chief fire officers in Scotland, on the safety of football grounds in both senior and junior leagues; and what steps are being taken before the new football season commences in August.

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): I met representatives of the Scottish Football Association, the Scottish Football League, the British Transport Police and the Association of Chief Police Officers (Scotland) on 1 July to review crowd control measures. Scottish fire brigades have at my request recently visited football grounds and other stadiums in their areas. Managements are being advised of any measures needed to improve fire safety in their grounds. The committee of inquiry into crowd safety and control at sports grounds will provide interim advice about crowd safety before the opening of the new season.

Mr. McQuarrie: I am grateful to my hon. Friend for his reply. I welcome the steps that the Scottish Office has taken towards improving crowd control and safety at football grounds. Can he say when the Popplewell report will be published? Can he also say whether there is the possibility of financial support being provided by the Football Trust to clubs which are not eligible for assistance from that source because they are not included on the football pools list? The smaller clubs are experiencing difficulty over their stands because of the ecommendations of the fire officers.

Mr. Stewart: The interim report of the committee under Mr. Justic Popplewell's chairmanship has just been

received by the Government, and we hope to publish it before the House rises for the summer recess. The non-league grounds to which my hon. Friend referred, such as Peterhead in his constituency, are covered by the fire masters' review. I am sure my hon. Friend will accept that the primary responsibility for the safety of individual facilities must lie with the operators of those grounds. However, the position of non-league clubs has been drawn to the attention of the Football Trust by the Scottish Sports Council.

Sir Hector Monro: Scotland can rightly take a great deal of credit for the steps that it has taken to improve its football grounds and to reduce alcohol abuse. However, does my hon. Friend accept that there are absolutely no grounds for complacency? Car he say what steps are being taken this summer, before the start of the football season next month, to improve grounds in the interests of sports safety?

Mr. Stewart: I agree entirely with my hon. Friend I do not believe that there is any complacency whatsoever in Scotland. There was no complacency at the meeting that I held on 1 July. I can assure my hon. Friend that the review of safety by the Football Grounds Improvement Trust includes all league grounds in Scotland; and safety is, of course, being considered by Mr. Justice Popplewell's committee.

Mr. Ewing: I congratulate the Under-Secretary of State and the Secretary of State on winning the argument against Home Office Ministers in relation to clause 1 versus clause 10 of the Bill which is at present before another place. It would have been preposterous if the staff of British Rail had been held responsible for alcohol being carried on trains going to football matches. Can the hon. Gentleman confirm that during his recent visit Mr. Justice Popplewell praised highly the safety standards at Scottish football grounds? May I also ask him not to single out football? The hon. Member for Dumfries (Sir H. Monro) will appreciate that attendances at many rugby matches in Scotland are far higher than attendances at football matches. It is important to consider safety at all sports grounds.
Is the hon. Gentleman aware that, as a result of his request to the fire brigades and the police, there is a distinct possibility of one senior Scottish club—I shall not name it—not being able to start the new season?

Mr. Stewart: The hon. Gentleman raised the first part of his question on Second Reading of the Sporting Events (Control of Alcohol Etc.) Bill. Home Office Ministers have reached agreement with us on appropriate changes to clause 1.
The hon. Gentleman is right to say that the problem is not limited to football. That is why the Scottish fire brigades were asked to visit other stadiums.
On the hon. Gentleman's final point, following the surveys by the fire masters, concern has been expressed about four Scottish league grounds. At one club the matter has been rectified, and at another measures are in hand. At two other clubs there could be restrictions on numbers in the new season.

Employment Policy

Mr. Ron Brown: asked the Secretary of State for Scotland if, when he next meets the Scottish Trades Union


Congress he will discuss the implications for Government policy on employment in Scotland of the recent miners' strike.

The Secretary of State for Scotland (Mr. George Younger): I am always willing to discuss with the STUC the implications for Government policy of important events. The most damaging effects of the recent miners' strike have been on employment in the industry itself.

Mr. Brown: As Ian MacGregor represents man's inhumanity to man—not forgetting wives and bairns—will the Secretary of State intervene to ensure that victimised miners are returned to work? Or is the highly placed, highly salaried chairman of the NCB doing the dirty work for the Government? When I met Mr. MacGregor at Edinburgh airport on Thursday, he was not interested in fair play. Indeed, when I mentioned conciliation, he thought that that was a brand of rye whisky. Will the Secretary of State intervene and do something to resolve this almighty problem, which affects a large section of the community in Scotland?

Mr. Younger: Dismissed miners who have complaints can go to industrial tribunals. They have a perfectly good course under the normal law.
As for the other effects of the strike, I do not accept what the hon. Gentleman said about Mr. MacGregor. The severe responsibility for the effects of the strike lies firmly on the NUM, which has not only done lasting damage to the Scottish coal industry, but has destroyed a large number of jobs.

Mrs. McCurley: When my right hon. Friend meets the STUC, will he emphasise to the congress that the steel industry in Scotland would be in a much safer position and that the BSC would be in profit if it had not been for the destructive effects of the coal strike? The example which the STUC set in wanting the steelworkers to come out was highly destructive for other jobs.

Mr. Younger: I agree with my hon. Friend. There is no doubt that the splendid efforts of the steelworkers in Scotland were made considerably more difficult by the efforts of the NUM, which tried and failed to close Ravenscraig.

Several Hon. Members: rose—

Mr. Speaker: Order. I appeal for brief supplementary questions.

Mr. Strang: Why is the NCB pursuing its policy of victimisation with such vengeance, particularly in Scotland? Surely the Secretary of State must recognise that innocent men and their families are being sacrificed and that this is a human rights issue. When will the right hon. Gentleman face up to that fact?

Mr. Younger: The truly innocent men, and their families, are the working miners who have been victimised shamefully. If striking miners have a case against them in law, they should come before the courts in the proper way. If they have complaints about their treatment by the NCB, they have recourse to an industrial tribunal, which is a perfectly fair process.

Mr. Henderson: Will my right hon. Friend stress to the STUC that the disastrous consequences of the strike for the potentially profitable coal faces at Frances and Seafield collieries have resulted in a considerable loss of jobs and

opportunities for the Fife economy? Does that not show that strikes rarely do anyone any good, and frequently do many people a great deal of harm?

Mr. Younger: My hon. Friend is absolutely right. Those coal faces and jobs in Fife were lost by the deliberate actions of the NUM in calling a strike. I am extremely apprehensive that for many years to come there will be many effects from this disastrous strike.

Mr. Douglas: Will the Secretary of State reflect on his answers? We have moved from the strike and are anxious that the union should be allowed to represent its members on an individual basis. Will the right hon. Gentleman lend his good offices to ensure, with the STUC and the NUM, that the NCB considers each of the more than 200 cases individually? Will he further lend his good offices to ensure that good industrial relations are reinstated in the Scottish coalfield, in the interests of the coalfield, of the Scottish economy and of re-establishing a good coal industry in Scotland?

Mr. Younger: The question of relations between the NCB and its employees is one which must be pursued with the NCB. If the unions wish to do so, they can represent members who appear before industrial tribunals. The NUM has caused the real damage. It would be much better if it put its weight behind recovery in the industry.

Mr. Hirst: Does my right hon. Friend agree that the cost of an inefficient mining industry is unnecessarily high coal prices, and that that is potentially far more damaging to the many industries in Scotland which depend on energy? Does he further agree that if the NCB does not have the resources available to invest in uneconomic pits, they should be offered to private buyers? Will he say that when he next meets the STUC?

Mr. Younger: I am grateful to my hon. Friend for his suggestions. A few weeks ago I had a long discussion with the STUC about the effects of the miners' strike. My hon. Friend is right to point out that if coal prices are made higher by industrial action, that must reduce the potential market for coal and jobs arising from the mining of coal. That comes back to the point that the NUM's actions have done a great deal of damage to the Scottish coalfield.

Mr. O'Neill: Will the Secretary of State cast his mind back to his meeting with the officials of the Polmaise colliery, Stirling district council and the central region, before the miners' strike started, about the potential closure of that colliery—the reason why the strike was started in the first place? Will he assure the House, as he did my constituents and local government colleagues, that he will do everything in his power to support that colliery and enable it to produce the coal that is so desperately needed in the central region? Will he assure us that the Scottish Office will back the colliery against Mr. MacGregor's wishes for closure?

Mr. Younger: The hon. Gentleman's reference to that meeting makes me feel extremely sad, as it took place shortly before the strike, and I offered to do all that I could to help. I shall always try to do anything that I can to help employment in Scotland, wherever it is. However, since then the same people whom I met and to whom I offered help were solidly on strike for almost a year and did immense damage both to their pit and to the entire


industry. They cannot wipe the slate clean. The blame for the disastrous effects on the Scottish coal industry lies with Mr. Scargill and the entire NUM.

Mr. Dewar: Can the Minister confirm that, as has been stated recently by the Secretaries of State for Energy and for Employment, an individual review is being conducted by the board? If so, does he agree that the rules of natural justice should be observed and that the men concerned should have the right to a hearing and to representation? Without that, we shall never escape from the conclusion that any review is merely tokenism and a gesture to get the board out of a difficult position over a wide spectrum of Scottish opinion.

Mr. Younger: I think the hon. Gentleman knows that the Secretary of State for Energy wrote me a letter, which was publicised, in which he said that he had made it clear that the National Coal Board would be examining the cases which had been in dispute, but that that did not alter the fact that the proper course is to go before the industrial tribunals. There is a right to representation before the tribunals and the men concerned have recourse to proper procedure in that way.

Teachers Superannuation Scheme

Mr. McKelvey: asked the Secretary of State for Scotland if the report on the quinquennial review of the Teachers Superannuation Scheme (Scotland) has been received by him; and if he will give a date when it will be laid before Parliament.

The Under-Secretary of State for Scotland (Mr. John MacKay): My right hon. Friend has not yet received the report from the Government Actuary. I am not therefore in a position to say when it will be laid before Parliament.

Mr. McKelvey: You must be outraged by that answer, Mr. Speaker. The English counterpart for this period, which is 1976 to 1981, was dealt with in December 1983, and the Scottish Office is dragging almost four years behind. I ask for an assurance that no sort of Machiavellian trick will feature in the negotiations over teachers' conditions. It is a disgrace that teachers' working conditions and pensions have not been reported on and that the current information is four years out of date. Will the Minister give an assurance that if the employers have to increase their contributions, the Scottish Office will back the additional contributions with increased budgets?

Mr. MacKay: The hon. Gentleman will know from his obviously deep knowledge of the subject that the production of the report is a matter for the independent Government Actuary. It is not a matter over which we in the Scottish Office have direct control. However, I expect to receive the report shortly.

Mr. Lambie: As a teacher's superannuation is dependent on his final year's salary, will the Minister give an assurance that he will begin a new initiative to try to resolve the present industrial dispute within Scottish schools following the decisions reached at the recent annual conference of the Educational Institute of Scotland at Inverness?

Mr. MacKay: Negotiations on teachers' pay do not fall within my responsibility when they involve superannuation matters. Such matters are for my right hon.

and hon. Friends. However, my right hon. Friend is prepared to meet the teachers and the management side at any time to discuss the way forward.

Agricultural Research and Advisory Services

Mr. Bruce: asked the Secretary of State for Scotland when he last met the Scottish National Farmers Union to discuss the impact of cuts in the agricultural research and advisory services on farms in the less favoured areas.

Mr. John MacKay: My right hon. and noble Friend the Minister of State met representatives of the Scottish National Farmers Union on 22 March 1985, when the future funding of agricultural research and development and of the advisory services was discussed. He has arranged to discuss this subject, among others, when he meets the president of the union next week.

Mr. Bruce: I am surprised that it is so long since the Government met the union, in view of the great concern among farmers in Scotland about the Government's policy. Is the Minister aware that I and my colleagues met senior representatives of the Scottish National Farmers Union this week, when they expressed deep concern about Government policy on cutting advisory services and capital grants? Nearly 90 per cent. of Scotland's farmers are in less favoured areas, and they require the Secretary of State and his Ministers to stand up and fight for them. There are problems which are peculiar to Scotland, and so far the Government's policy is causing loss of morale and deep despair. Many farmers will be forced out of business and off the hill, and that will undermine rural communities.

Mr. MacKay: My right hon. and hon. Friends meet the Scottish National Farmers Union at the times that I have stated, and they will meet representatives next week. when they will discuss these matters yet again. My right hon. Friend the Secretary of State met representatives of the SNFU briefly at Ingliston, where these matters were discussed. It is worth reporting to the House, before we believe all the histrionics of the hon. Gentleman, that, even after the expenditure reductions are made, almost £29 million will be spent every year on research and development and advisory services in Scotland.

Mr. Home Robertson: Will the hon. Gentleman acknowledge the need for a comprehensive research and advisory service for Scottish agriculture in the difficult years of change that lie ahead? How can such a comprehensive research and advisory service be established if in the coming 18 months the Government go ahead with a 41 per cent. cut in the budget for this work?

Mr. MacKay: If the hon. Gentleman had listened, he would have realised that I said that, even after the reductions in expenditure, about £29 million will be spent on research and development in 1987–88. That is a considerable sum of public money which is still being spent on research and development.

Mr. Andy Stewart: Does my hon. Friend agree that the cutback may be a good measure, as imports of agricultural machinery increased by 112 per cent. during that period?

Mr. MacKay: My hon. Friend is correct to point to what has happened during the past few years. The claims of Opposition parties about the effect of research and


development are exaggerated. Research is conducted in many more places than just the Government research institutes. The industry conducts research into a number of matters.

Mr. Eadie: The hon. Gentleman must be aware that his reply is causing concern to some of us. I had an Adjournment debate on this subject, because this matter affects my constituents on the Bush estate, Penicuik area. The Monister's colleague, Lord Gray, has written to me saying that the whole matter will be considered in relation to the submissions. Overwhelming Scottish opinion is that the Government's policy is wrong. Is the hon. Gentleman telling the House that the Department has reconsidered this matter since Lord Gray wrote to me?

Mr. MacKay: A consultation paper on future strategy for research and development was issued on 30 May. Consideration is being given to the comments that were received. I think that I explained the position to the hon. Gentleman in his Adjournment debate. That is still the position.

Mr. McQuarrie: I accept that £29 million will be available in 1986–87, but is my hon. Friend aware of the considerable concern that has been expressed by universities, colleges and farmers in the less favoured areas? Will my hon. Friend continue with the consultation to which he referred in a written parliamentary answer to ensure that that cut is not implemented until there is a satisfactory solution to the problem?

Mr. MacKay: We shall take account of all the observations made to us as a result of the research and development consultative paper. A similar paper on the advisory service will be published shortly. We shall take account of all those matters. I am sure that the colleges, in their observations, will be mindful of the importance of the advisory services keeping a high profile in the less favoured areas.

Mr. Wilson: Why did the hon. Gentleman tamely pass on to the Scottish advisory services the cuts that had first been produced in England? Does he realise that a high proportion of the farms in ill favoured areas will not be able to afford the fees for the advice that they need to cope with the changes that will be imposed through the common agricultural policy?

Mr. MacKay: The reductions in expenditure were not passed on from England. They were part and parcel of the negotiations with the Treasury on the total amount of spending on agriculture in England, Wales and Scotland. Even after these reductions are made, £29 million will still be spent on research and development. A total of £34 million will still be spent on research and development and the advisory services.

Mr. Ewing: Does the hon. Gentleman appreciate that £29 million is 41 per cent. less than the amount being spent at present? Has he and, more importantly, his noble Friend come to understand that the link in Scotland between research and development and the advisory services is much greater than that which prevails in England and Wales? Is he aware that the cuts in Scotland will do irreparable damage to agriculture? The Minister should withdraw these proposals.

Mr. MacKay: I cannot believe that a continuing total expenditure of £34 million for 1987–88 represents

irreparable damage. We shall be considering how to make those reductions after discussions with the colleges and research institutes, after taking the advice of the Priorities Board on priorities for research and development and after listening to the observations of the National Farmers Union.

Agriculture Industry

Mr. Kennedy: asked the Secretary of State for Scotland if he will make a statement on the current situation within Scottish agriculture.

Mr. John MacKay: Last year good weather conditions and improved efficiency contributed towards the significant recovery in Scottish farm incomes.
It is too early to predict income levels for 1985.

Mr. Kennedy: Is the Minister aware that the new capital grants scheme which has just been announced by the Government has already been described by the president of the National Farmers Union in Scotland as a further attack on United Kingdom farm competitiveness? As some of the more marginal smaller farmers in Ross-shire are going to the wall, will he explain why the cuts which have been announced in the new scheme go far beyond what was anticipated or expected by Europe?

Mr. MacKay: The new scheme, which gives grant rates of 30 per cent. for the less favoured areas and 15 per cent. for other areas, provides meaningful levels of assistance which will allow adequate investment in farming.

Mr. Bill Walker: My hon. Friend will be aware that barley is important to Scottish agriculture. He will also realise that it is an essential ingredient in the manufacture of Scotch. When distilleries close, that affects the market for barley. Is my hon. Friend aware that Arthur Bell and Sons is the only company in Scotland which has been opening distilleries? Will he advise Mr. Ernest Saunders of Guinness that hon. Members on both sides of the House are interested in the current problem, which is of importance to us all?

Mr. MacKay: My hon. Friend has rather ingeniously introduced matters that are rather far from agriculture. I shall leave the matter at my boundary of responsibility by confirming that barley makes splendid whisky.

Polkemmet

Mr. Dalyell: asked the Secretary of State for Scotland what response he has sent to the West Lothian district council evidence to the Cooper committee on Polkemmet, a copy of which has been sent to him by the hon. Member for Linlithgow.

Mr. Allan Stewart: My right hon. Friend does not propose to comment on this document. The closure of collieries is a management matter for the NCB in which it would not be appropriate for Ministers to intervene.

Mr. Dalyell: Do Ministers dispute the West Lothian figures?

Mr. Stewart: As my hon. Friend the Under-Secretary of State for Energy told the hon. Gentleman on Monday, he will be responding to the council's statement and the points that the hon. Gentleman has made.

Mr. Dewar: Surely the Minister recognises that it is unsatisfactory to say that he will not respond. It sounds almost as if he is saying that he has no interest in the matter. It is an area which has already been traumatised by the British Leyland closure at Bathgate, where unemployment is appallingly high, where Polkemmet is an important source of jobs, and which is interrelated with the whole Ravenscraig issue. Does he not recognise that the Government have a duty to take an interest and to make it clear that they will help an area which is determined to help itself, as the Cooper report underlines?

Mr. Stewart: I can only repeat what I have told the House, that my hon. Friend the Under-Secretary of State for Energy will be responding to the point about that document. I shall underline the Government's commitment to the Bathgate area. Good progress has been made on the Bathgate working party's various recommendations. For example, I am pleased to note that agreement has been reached on the financing of the restoration work on the Bathgate-Edinburgh rail link, which will commence shortly with a view to the line re-opening in about May 1986. The hon. Gentleman will be aware of the range of other measures that have resulted from the joint working party on Bathgate.

Trout Protection

Mr. Hunter: asked the Secretary of State for Scotland what further consideration he has given to imposing a trout protection order on the Tay system under the Salmon and Freshwater Fisheries (Scotland) Act 1976.

Mr. John MacKay: My right hon. Friend has before him the formal proposals for a protection order, the objections and representations resulting from the advertisement of the proposals, and the views of the consultative committee on freshwater fisheries, which met recently.

Mr. Hunter: Will my hon. Friend take the opportunity to clarify the Government's attitude to the widespread concern felt about trout stock levels in the Tay, and also more generally about salmon and freshwater fish stock levels?

Mr. MacKay: I assure my hon. Friend that we are taking this order, as we do all others, seriously. As he correctly points out, there will be a danger to the future of brown trout fishing if the current rise in various unsavoury fishing practices using set lines and the like continue.

Mr. Corrie: Does my hon. Friend agree that bringing in an order in one area merely puts pressure on other areas throughout Scotland? We must be careful to ensure that we do not slowly shut off some places as a result of the dreadful pressure on areas such as the south-west of Scotland.

Mr. MacKay: My hon. Friend has made a valid point. We have some experience of it in my constituency. But, simply because of the drawback, we should not decline to implement the Labour Government's Act and put protection orders on those parts of the country which come forward with them.
I suggest to my hon. Friend that in his part of the country the angling clubs and the owners might consider getting together and putting forward protection orders of their own.

Springburn (Job Creation)

Mr. Martin: asked the Secretary of State for Scotland what steps are being taken to attract new industries to Springburn in view of the British Rail Engineering Ltd., redundancy announcements.

Mr. Younger: A contract was recently placed for a privately funded 130,000 sq ft business park at Port Dundas, which is expected to accommodate 300 jobs. In addition, the SDA and BREL have jointly funded a study into alternative employment opportunities in Springburn.

Mr. Martin: When the Secretary of State last spoke to this House about Springburn, he said that a study would be before the House soon. Exactly when will we get the results of the study? He knows full well that it will take more than an industrial park at Port Dundas to resolve the problems of Springburn.

Mr. Younger: I entirely share the hon. Gentleman's concern that the study is urgently needed. I understand that the agency has received a draft report and expects the final version any time now. It will then move to assess the recommendations as quickly as possible.

Mr. Hirst: As I also have constituents in Bishopbriggs and Kirkintilloch who will be affected by the proposed redundancies at BREL, will my right hon. Friend make representations to my right hon. Friend the Chancellor of the Exchequer to consider the establishment of an enterprise zone at Springburn?

Mr. Younger: I shall consider my hon. Friend's suggestion. He may be aware that a great deal of good news has been apparent in Glasgow in recent months. Glasgow-based companies have been winning contracts or committing investment at the rate of a staggering £33 million a month. Many of the projects are designed to refurbish the city—a £5 million contract for the business park at Port Dundas, a new £2·5 million meat market, £7 million to refurbish Gartnavel hospital, a multi-channel cable system costing £15 million, new investment at Glasgow airport, a new commercial centre for Bridgeton. and a £10 million extension to a city centre hotel

Mr. Craigen: In view of the despairingly high level of unemployment in the north of the city—and particularly of a long-term nature—will the Secretary of State give us an assurance that he will take a personal interest in trying to generate more employment in the north of the city?
Will the Secretary of State agree to look again at BREL, in view of its importance to the Springburn area?

Mr. Younger: I assure the hon. Gentleman that I will be taking a very close interest. It is for BREL to decide on its operations. As the hon. Gentleman will probably know, there has been a great deal of help for Glasgow recently. In the past six years there has been over £735 million of new investment, and 33,000 new and safeguarded jobs in the Glasgow travel-to-work area.

Royal Highland Show (Ministerial Speech)

Mr. Maclennan: asked the Secretary of State for Scotland if he will place in the Library a copy of his speech delivered at the Royal Highland Show on 17 June.

Mr. John MacKay: No speech was delivered, but my right hon. Friend answered some questions asked by representatives of the press.

Mr. Maclennan: When, in those summarised remarks, the Secretary of State accepted that the Government still intended to support the farming industry, he was greeted with total incredulity. Does the Minister realise that, since the announcement of the capital grant cuts of a week ago, with reductions from 70 to 30 per cent. in the less favoured areas, in grants available for re-seeding, fencing and drainage, the Government will be regarded as completely opposed to the interests of farming in 87 per cent. of the areas covered?

Mr. MacKay: I think that I answered the hon. Gentleman's point about 30 and 15 per cent. still being fairly high levels of grant, which we believe will keep up agricultural investment. On the livestock compensatory allowances the Government spent £37·9 million; on the beef premium scheme we spent £22·4 million; on the Buckler cow premium scheme £9·4 million; and on the sheep variable premium scheme £23·9 million. I suggest that the hon. Member takes a more balanced view.

Mr. Michael Forsyth: Had my right hon. Friend the Secretary of State been able to make a speech at the Royal Highland Show, would he have taken the opportunity to respond to the remarks by the chairman of the Countryside Commission, who has expressed considerable concern that tax avoidance schemes are resulting in the development of large-scale commercial forestry operations in Scotland? These are threatening fishing and tourist interests, and are resulting in inflated land values which threaten the future of hill farming. As he did not have an opportunity to make such a speech, will he undertake to investigate this matter?

Mr. MacKay: I shall not attempt to say what my right hon. Friend would have said if he had made a speech. Forestry has an important role to play in the countryside. I accept that forests must be planted in such a way as to be compatible with the interests of agriculture and with the environment in general. For the long term benefit of the country and for employment, the forestry industry has an important role to play.

Drunkenness (Designated Places)

Mr. Hugh Brown: asked the Secretary of State for Scotland how many designated places under section 5 of the Criminal Justice (Scotland) Act 1980 have been established; whether any current applications are being considered; and if he will make a statement.

Mr. John MacKay: One, at Albyn House, Aberdeen. Applications for grant are currently being considered for designated places in Dundee, Paisley and Peterhead.

Mr. Brown: Where does the Minister place most of the blame for the delay and poor response to an idea that has been accepted by everyone in the field as being urgent, necessary and useful?

Mr. MacKay: I shall resist the temptation to place blame. As the hon. Member knows, I have encouraged the concept of these places. The Government's powers are restricted to helping voluntary organisations, and local authorities are expected to play their part in assisting schemes of direct local benefit. I hope that some of the schemes which are currently coming to us will prove to be ones we can support, and which local authorities can also play their part in supporting.

Dr. Godman: Designated places, while most welcome, tackle only a small area of alcohol abuse—

public drunkenness. When will the Government consider giving a part of the massive revenues which accrue from the sale of alcohol to educational programmes, particularly those for the young?

Mr. MacKay: It is important that we convince people that drinking sensibly and in moderation is perfectly satisfactory, and that alcohol abuse can be dangerous. The Scottish health education group carries out advertising campaigns and distributes packs of various kinds to help on the issue. We also encourage schools, as part and parcel of their general health education scheme, to draw attention to that programme.

Mr. McQuarrie: My hon. Friend mentioned Peterhead. He will be aware that there is an application from Whitehill House in Peterhead which is run by a voluntary organisation. The application was made in May this year. When is my hon. Friend likely to come to a decision on that application? I hope that the answer will be favourable.

Mr. MacKay: We are looking carefully at the applications from Peterhead, Dundee and Paisley. I cannot say when I shall reach a conclusion. We shall try to do it as quickly as possible.

Mr. Craigen: The Minister said that he had three proposals before him. How many applications have there been in total from voluntary bodies and local authorities for detoxification centres? Will the Minister have another look at the three-year funding arrangements?

Mr. MacKay: I cannot answer in detail the first part of the hon. Member's question. I have no evidence that the funding arrangements are stopping the programmes from coming forward. If there were evidence that that was the case I would look at that as I have looked recently at joint funding between health boards and local authorities.

Rate Relief

Mr. Marshall: asked the Secretary of State for Scotland what further representations he has received about the operation of the Rating (Revaluation Rebates) (Scotland) Act 1985.

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): I have received a small number of representations on various points. Many of these points were the subject of debates in both Houses of Parliament before the passage of the Act last month. The others, relating more to the detail of the rebate scheme, have all been the subject of discussion with officials of the Convention of Scottish Local Authorities, rating authorities and assessors.

Mr. Marshall: What has happened to the £20 million shortfall of the £50 million promised at Perth to hard-pressed ratepayers? Will the Minister reconsider the matter in the light of the statement by the Solicitor-General for Scotland, who said publicly that he is in favour, as we are, of the entire £50 million being used? Has the Minister received any representations to that effect from the Solicitor-General?

Mr. Ancram: First, there is no £20 million shortfall. The scheme was always designed to be demand-led—[Laughter.] Opposition Members may mock that, but I remember that about three months ago they were talking


about figures considerably below £30 million, which is unprecedented and generous support at this time. I have discussed the matter with my hon. and learned Friend the Solicitor-General. He is content with the scheme that we shall debate tonight, and he assures me that he will join us in the Lobby.

Mr. Fairbairn: As my hon. Friend is in the almost unique position of having been promised more money by the Treasury than he needs, will he use that example to ensure that the Treasury agrees forthwith with the Secretary of State and abolishes the distinction between guidelines and assessed needs, so that the inequity suffered by those who are above the guidelines but below the assessed needs can also be abolished forthwith?

Mr. Ancram: My hon. and learned Friend has raised this matter previously. He will be aware from statements by me and by my right hon. Friend the Secretary of State that this matter is being seriously considered by the Government.

Mr. Roy Jenkins: Do the Government still intend to replace the rating system during this Parliament?

Mr. Ancram: The right hon. Gentleman knows that the Government are reviewing the system of local government finance. We have made it clear that we hope to introduce proposals at about the year end. It would not be right for me to pre-empt the consideration that leads to those proposals.

Mr. Corrie: Is my hon. Friend aware that several large companies, including Roche and Shell in my area, will receive no rebate under this order? Will he ensure that their appeals are heard reasonably soon, because they face large rate increases this year?

Mr. Ancram: I appreciate the need for appeals to be heard as swiftly as possible. Obviously, that is in the interests not only of the appellants but of the assessors, and I shall try to keep an eye on the matter.

Mr. Dewar: Does the Minister stand by the statement of the Secretary of State that a manifesto pledge on rating reform will not be good enough for Scottish Conservatives at the next election? Does the Minister accept that he cannot shrug off the £20 million as though it was small change? Is it not a scandal that the Secretary of State should parade the £50 million that he extracted from the Treasury as a battle honour at the Conservative party conference, and then simply not deliver? What does the Minister mean by the phrase "demand-led"? Is he trying to say that there is no demand from Scotland's hard-pressed ratepayers for the additional £20 million which they were promised, but out of which they are now being cheated?

Mr. Ancram: The hon. Gentleman will be aware, because we have debated the matter several times, that the Government had to decide on a multiplier beyond which the effects of revaluation would be unfair on those who had to bear them. We decided to have a multiplier of three, which was below the overall effect of the Labour Government's revaluation, when no help was given to ratepayers. It is a fair figure. When I say that the system is demand-led, I mean that the amount spent under the scheme depends on the number of those eligible under that multiplier.
As to my right hon. Friend's statement, the hon. Gentleman will have heard what he said. That remains the case.

Economic Prospects

Mr. Hirst: asked the Secretary of State for Scotland if he will make a statement about current economic prospects in Scotland.

Mr. Younger: Last month the Scottish CBI reported optimism in manufacturing continuing to grow with orders and output showing strong positive trends, investment in plant and machinery showing an upturn, and employment trends strengthening.

Mr. Hirst: I am grateful to my right hon. Friend for his reply and I welcome the action that the Government have taken to stimulate the creation of new jobs in Scotland. Does he agree, however, that uncertainty over the future of Ravenscraig is casting a long shadow over economic and employment prospects in Scotland? While I accept that the BSC corporate plan is not yet available, will he reassure me and the House that he and his ministerial colleagues will fight like tigers for steel jobs in Scotland?

Mr. Younger: I appreciate that there is widespread concern about the future of Ravenscraig and, when the BSC has submitted its corporate plan, I can assure my hon. Friend that Ministers will have to consider it very carefully. At present, however, there are many other good developments in the Scottish economy, including a record level of investment in new projects, which I expect to continue.

Mr. Millan: Is the Secretary of State aware that, contrary to some suggestions in the press and elsewhere, there is widespread concern in Scotland at the Guinness takeover bid for the highly successful Scottish company of Arthur Bell and Sons, and that some of the statements by Guinness are not only unpersuasive but positively misleading? Will he put his weight behind the pressure for a reference of this bid to the Monopolies and Mergers Commission?

Mr. Younger: As the right hon. Gentleman knows, this is a strictly a matter for my right hon. Friend the Secretary of State for Trade and Industry, who will take note of what the right hon. Gentleman has said. I of course remain extremely interested in the subject, and I have personally seen representatives of both companies.

Oral Answers to Questions — SOLICITOR-GENERAL FOR SCOTLAND

Terrorism

Mr. Bill Walker: asked the Solicitor-General for Scotland if he will give details of the instructions which his Department has given to procurators fiscal in connection with the prosecution of individuals charged with acts of terrorism.

The Solicitor-General for Scotland (Mr. Peter Fraser): No, Sir.

Mr. Walker: I realise that my hon. and learned Friend cannot make a statement on specific cases, but does he agree that, had it not been for the powers which the police in Strathclyde had under the Prevention of Terrorism


(Temporary Provisions) Act 1984, the explosives which were discovered there recently would never have been found?

The Solicitor-General for Scotland: Clearly, I cannot comment on any individual case. However, I think that my hon. Friend's more general proposition is correct. We have a very real problem with terrorism, and the powers which are now given under the Act to allow for detention for a longer period seem in many circumstances to be more than justified.

Mr. Ron Brown: Is the Solicitor-General aware that not so long ago an hon. Member was detained and roughed up by the Glasgow police—[HON. MEMBERS: "Name him."] I refer of course to myself. Will the Solicitor-General ensure that this does not happen again to other Members of Parliament or to trade unionists, because repeatedly the Prevention of Terrorism Act is used against trade unionists?

The Solicitor-General for Scotland: I certainly was not aware that the hon. Gentleman had ever been detained under the Prevention of Terrorism Act. However, if he has a complaint to make against the police he should, as a responsible Member of Parliament, make that complaint properly so that it can be investigated, so that such allegations do not remain unsubstantiated and, if necessary, can be properly tested in the courts.

Mr. Maclennan: Will the Solicitor-General resist any temptations from the extreme Right or the extreme Left to put political pressure on the procurators fiscal?

The Solicitor-General for Scotland: I am wholly at one with the hon. Gentleman in believing that the system of procurators fiscal in Scotland is a fine feature of our legal system. They stand independent and objective in the prosecution of crime in Scotland. Both my noble and learned Friend and I would be very anxious to ensure that that status is always maintained.

Mr. Fairbairn: Will my hon. and learned Friend have a word with his right hon. Friend the Secretary of State for Scotland and his right hon. and learned Friend the Home Secretary, and urge them to urge on the Metropolitan police the discretion of the Strathclyde police? The apparent desire of the Metropolitan police to advertise their genius in London did a great deal to undermine the magnificent work of the Strathclyde police force, which would probably have resulted in more arrests and more fines in the matter which it had under review.

The Solicitor-General for Scotland: I take the point that my hon. and learned Friend makes, but I cannot comment on the individual case. He will be aware that where people are awaiting trial, given the provisions of the Contempt of Court Act, it would be extremely ill-advised for anyone—police officer, Minister or anyone else—to comment on such cases lest, in one way or another, that might prejudice the right to a fair trial.

Rape

Dr. Godman: asked the Solicitor-General for Scotland against how many people proceedings have been instituted for rape and related offences in the last three months.

The Solicitor-General for Scotland: Proceedings were taken against 76 people in April, May and June.

Dr. Godman: During the course of a recent rape trial in the High Court at Paisley. the names and addresses of the the two accused were published in the Greenock Telegraph. Does the hon. and learned Gentleman agree that, in the interests of fairness, the names and addresses of the accused in rape trials should not be permitted to be published unless or until they are found guilty?

The Solicitor-General for Scotland: I have seen the press reports to which the hon. Gentleman refers, but I see no breach of the law in the way in which publication was made in the journal concerned. However, the hon. Gentleman will be aware that during our proceedings on the Law Reform (Miscellaneous Provisions) (Scotland) Bill, we considered that very matter in Committee. A new clause was moved to deal with it but, after consideration, it was withdrawn. Provision is made for the anonymity of complainers, but in Scotland, if the accused are adults, the giving of names and addresses is permitted.

Coal Mining Dispute

Mr. Dalyell: asked the Solicitor-General for Scotland what are the most recent conveniently available statistics he has for prosecutions during the miners' dispute.

The Solicitor-General for Scotland: In all. 1,012 people have been prosecuted for incidents arising out of the miners' dispute; 721 of those have been convicted; while 227 have been acquitted. There are still 64 cases pending.

Mr. Dalyell: What is the Minister's attitude towards the forthcoming Ealing meeting between Mr. McGahey and Mr. Loudon on this subject.

The Solicitor-General for Scotland: As Solicitor-General for Scotland, I have no opinion on that matter. As I have said repeatedly in answers to questions on the subject, it is a matter of prosecutions before the criminal courts. Issues of industrial dispute and questions of unfair dismissal are to be resolved either as a matter of negotiation or before the tribunals that are established to determine whether there has been an unfair dismissal. It is not for me to comment on that.

Mr. Wallace: Will the hon. and learned Gentleman accept that, among those acquitted, there have been reported instances of people who have also been dismissed? Will he, with his legal background and training, explain to the Secretary of State for Energy the distinction between unfair dismissal cases, which can lead to compensation but not necessarily to reinstatement, and the conciliation procedure, which can lead to people who have been unfairly dismissed being reinstated in their jobs?

The Solicitor-General for Scotland: I appreciate the point that the hon. Gentleman makes, but he is wrong to assume that either the Secretary of State for Scotland or the Secretary of State for Energy fails to understand the issues. My right hon. Friends and I have said repeatedly that it is a matter for the National Coal Board to determine. If it has it wrong, there are tribunals that deal with matters of unfair dismissal, where remedies of one sort or another are available to those who complain.

Mr. Henderson: In view of persistent rumours that there has been harassment of miners who worked during


the strike and their families, will my hon. and learned Friend say whether there have been any prosecutions of that nature since the dispute?

The Solicitor-General for Scotland: It is obviously difficult for me to identify that or to give any statistical information. However, on an anecdotal basis, I am aware that cases have come before the courts involving assaults and breach of the peace in which those who were involved have been working miners or those who have been on strike. How directly those come out of the miners' strike is an issue on which I cannot give a concluded view.

Mr. Eadie: Is the hon. and learned Gentleman aware that the NCB has written to chief constables asking that the NCB be allowed to precognosce police officers before they attend industrial tribunals? Apart from any question concerning the legality of that, does the hon. and learned Gentleman not think that it would be a waste of time as well as interference?

The Solicitor-General for Scotland: No. Generally, in Scotland, if people are to be required as witnesses before courts or tribunals, it would seem good sense that before they come into the court or the tribunal to give evidence, some sign as to what their evidence is likely to be should be given. If people are seeking to precognosce policemen, that would seem a sensible step.

Mr. Dick Douglas: The hon. and learned Gentleman will be aware that I have written to him about a specific case that is illustrative of the issue generally, the case of Mr. Allan Collins. Sheriff Reid in Dunfermline has shown his concern that the miner involved in that case should not suffer the double jeopardy of being fined by the court and being dismissed by the Coal Board. Whatever else may be at issue, the Solicitor-General has some responsibility for saying clearly to the House and the country that, in the interests of justice, miners who have expunged their responsibilities to society should not suffer the severe penalty of being dismissed by the Coal Board.

The Solicitor-General for Scotland: The hon. Gentleman used the term double jeopardy, which I might

use in a rather more technical sense. I am aware of the case, and the hon. Gentleman is aware that, following the concern that the sheriff has shown, steps were taken to have that case adjourned and brought before him at a later stage. I understand that that later stage has not yet occurred. Once again, I have to say that in those circumstances it would be wholly inappropriate for me in any way to express a view on it.

Mr. Willie W. Hamilton: On a point of order, Mr. Speaker.

Mr. Speaker: Order. Does it arise out of questions?

Mr. Hamilton: It arises directly out of questions, Mr. Speaker, and you will probably know the point that I am about to raise.
You might recall, as I do, when Prime Minister's questions came after question No. 45, and that question was often reached. Today, and this is not for the first time in Scottish questions, we reached only No. 12 by 3.20 and we had no less than 10 minutes on question No. 2 on the miners' strike, which is as important to me as to other hon. Members. However, there are more nurses in Scotland than miners, and some of us attach as much importance to nurses' conditions as we do to those of miners.
My point of order is simple. My question is No. 13, which was not reached. It relates specifically to nurses' wages and how that the interests of patients will be jeopardised because of the way in which the wage increase is to be financed. This is extremely important. I know that you, Mr. Speaker, consider questions carefully before you come to the Chamber, and I hope that next time you will assess the relative importance of questions. I hope that when next I table a question on this important matter you will take this occasion into account and take steps to see that my question is reached.

Mr. Speaker: In fairness to the hon. Gentleman, I agree that we did not make good progress. I interrupted on two occasions, and many times from a sedentary position, as both questions and answers were very long.

Teachers (Pay)

Mr. Giles Radice: (by private notice) asked the Secretary of State for Education and Science if he will make a statement about the dispute on teachers' pay following the adjournment of the talks in the early hours of this morning.

The Secretary of State for Education and Science (Sir Keith Joseph): I regret that there was not a settlement to the teachers' pay dispute by early this morning. I am sure that the whole House shares that regret. The Government are clear that they want the dispute settled and our schools back to normal, but not at any price.
Yesterday, the management side made clear its willingness to see a settlement involving 5 per cent. for all teachers from 1 April this year, with an underpinning figure of £480 a year. In addition, it was willing to contemplate a merger of scales 1 and 2 with effect from 1 September and a further 1 per cent. on all scale points with effect from 1 November, provided that agreement could be reached in principle with the teachers on a total structure package covering pay and conditions to be discussed with me in time for any resulting agreement to be built into next October's rate support grant decisions. That would have given teachers a money increase of a little over 5·8 per cent. this year and the base line for teacher salary negotiaions beyond November 1985 would have been increased by over 6·4 per cent.
I understand that the employers made it clear that those figures took them to, and in many cases beyond, the limit of their ability to pay. The teachers were not willing to accept. The House is aware that I wrote on 21 May to the then chairman of the management panel about pay and conditions of service. I have since repeated the Government's position. We are not willing to make additional resources available for 1985–86 or to relax expenditure targets and grant holdback arrangements for that year, but we are willing to make extra resources available for teachers' pay in 1986–87 and to help meet the cost of removing midday supervision of schools from teachers' standard duties provided—I must emphasise this—that there is satisfactory progress by October towards the Government's objectives for improving quality and standards in the education service.
I have made it plain that October is the critical period because of the timing of Government decisions on rate support grant. After yesterday's meeting, it is all the more important for local authorities and teachers, as well as the Government, that acceptable progress be made by October, thus allowing additional resources to be unlocked for the education service. As a result, local authorities would be able to offer substantially improved career and promotion prospects based on consideration of all of the relevant factors such as teachers' qualifications, skills and experience, the quality of the work done and the demands of particular teaching posts and the difficulty of filling them. Linked with that, the Government would want a clearer statement of teachers' duties. The Government are willing to consider whether midday supervision might not be outside the standard expectation and be arranged and paid for separately. I dearly invite local authority employers and teachers to make progress in those directions.

Mr. Radice: The Secretary of State has once again told the House about the contribution that he is prepared to make towards an agreement with the teachers next year, but parents want to know what, apart from general exhortation, he is doing to solve this year's dispute. I am disappointed that the Labour-led employers' imaginative new approach has not yet produced a settlement—[Laughter.] It is quite clear that Conservative Members are not interested in a settlement.
Does the Secretary of State agree that, during the 13-hour marathon session, the employers and the teachers demonstrated flexibility? Should not the Secretary of State show equal flexibility and help teachers and employers to bridge the gap that is still between them? Could he at least relax the RSG penalties? The right hon. Gentleman knows that the Labour party is doing everything in its power to bring about an agreement.
Is it not about time that the Secretary of State descended from his ivory tower and did everything in his power to solve this dispute, which is proving to be so damaging to our education?

Sir Keith Joseph: The Government will not relax the target and penalty framework. I must remind the hon. Gentleman that I have been offering on behalf of the Government the same sort of contribution towards the financing of education on the same conditions as have been repeated frequently since 21 May for well over a year. The teachers have consistently refused to discuss it. It is not I who have lacked flexibility. As for the opportunities of the hon. Gentleman and his colleagues in the Labour Party, I would remind both him and them that they have allies in the teacher associations. What is he, and what are they, doing to bring the teacher associations, in particular the National Union of Teachers and their leaders—[HON. MEMBERS: "You are the Secretary of State."] The hon. Gentleman laid himself open to this question, since he asserted that he and his party are doing their best to bring the dispute to an end. I have to remind him, and it, that they have allies among the teacher unions, in particular among the leadership of the National Union of Teachers. What are they doing to bring those individuals to their senses and face reality? The pupils must come first. I should like for once to hear the hon. Gentleman put their interests before those of the unions.

Mr. David Madel: Should not the employers make sure that each individual teacher understands precisely what the latest offer is? Then the unions, with the help of ACAS, should ballot the teachers not only on the latest offer but on the wider issue of restructuring salaries.

Sir Keith Joseph: Mr. Teacher—Mr. Speaker. [Laughter.] Your predecessor, Mr. Speaker, was a teacher, but that does not justify my slip of the tongue. My hon. Friend has made a valid point. I am not at all convinced that every individual teacher knows what is on offer from the Government. If I could find a way of making sure that all teachers did, I should pursue it. It would then be up to the teacher unions to pursue the idea of balloting, again in some cases, if they so decided.

Mr. Clement Freud: We agree that pay and conditions must be linked, but would not the Secretary of State agree that he must show a little more flexibility? Nobody will come out of this


dispute getting what he wants. Might he not think again about the 14 points in his letter of 21 May and at least agree some of the uncontentious points? It seems that the Government have two alternatives. The first is to do nothing and let the teachers and the employers stew. The other is to show a little understanding of what is going on and to depart a little from their inflexible position.

Sir Keith Joseph: The hon. Gentleman is ignoring the fact that I have offered, on behalf of the Government, additional money for teachers on condition that they cooperate in improving the effectiveness of schooling, which is, after all, for the benefit of the children.

Mr. Mark Carlisle: Since it must by now be abundantly clear to everyone, first that the Government will not add further funding this year for teachers' pay, and, secondly, that the employers have gone as far as they possibly can, as they said last night, within those limits is it not now in the teachers' own interests that they should start to talk immediately about restructuring pay and conditions so as to take advantage of what the Secretary of State has said about next year? Could my right hon. Friend consider whether it would help in that direction if he indicated the sort of figures that he might have in mind, should a suitable agreement be reached?

Sir Keith Joseph: I entirely agree with my right hon. and learned Friend, but I shall be unable to give an indication of a figure for what might be available until some willingness to negotiate is shown and some progress has been made.

Mr. Martin Flannery: Is it not a fact that the Government are grossly undervaluing teachers in the state sector and are responsible for the lack of the education that children would have received if the Government paid teachers a proper wage?
Why has the Secretary of State, at this time of all times, linked conditions of service with teachers' wages for the first time when they are saying that they should get their proper wage now and that they would be willing to discuss conditions of service and restructuring afterwards? Most people do not know that, because the press does not tell them. It is disgraceful that the alliance should have gone along with the Government in this.

Sir Keith Joseph: The Government are above all concerned with the effectiveness of schooling for the children. It is on that basis that we seek the co-operation of the teachers.

Mr. Harry Greenway: Does not my right hon. Friend agree that the time has come to discuss the salaries of head teachers and deputy head teachers separately? Will he bear in mind that for one spell of 13·5 hours last week, teachers' unions and the employers were talking separately and came together for only 18 minutes of negotiation? Does not that show that the Burnham structure has decayed and should be dispensed with?
Does my right hon. Friend know that the Labour education spokesman, the hon. Member for Durham, North (Mr. Radice), shared a platform in outer London the other day with Militant Tendency and sacked miners and said that he was delighted that there were strikes in 14 schools, including two special schools? The Labour party, and especially the hon. Member for Durham, North, is damaging children. It is time that it stopped.

Sir Keith Joseph: I have to agree with my hon. Friend that the Labour party seems to choose to support teachers the whole while, in conflict with the interests of the children. I am concerned that, as far as I can gather, the differentials of head teachers seem to have come under pressure during the negotiations. I hope that the importance of adequate differentials for heads and their deputies will be borne in mind.

Mr. David Young: Will the Secretary of State take on board the fact that if he were negotiating on behalf of a private organisation or company, he would rightly have been sacked many months ago? Will he also take on board the fact that the choice that he is giving teachers is either more flexibilityfrom the Government or that they should leave the profession if they want an adequate standard of living?

Sir Keith Joseph: No, there is a third alternative, which is to negotiate to secure additional money from the taxpayer so that transformed career and promotion prospects may be made available to teachers.

Mr. Nigel Forman: Is it not clear that my right hon. Friend's letter of 21 May offers a sensible basis for the settlement of this difficult and long-running dispute? Would not it be helpful if the proposals in that letter were made more publicly available to the people who should know about them?

Sir Keith Joseph: Yes, indeed. If I could find a way to make them more publicly available, I should wish to pursue it, but my hon. Friend must remember that, as Secretary of State, I do not employ the teachers.

Mr. Derek Foster: If the Secretary of State will not stir a finger to achieve a settlement, will he stop denigrating the teachers and admit that, by his own action, he has forfeited their co-operation which he says is essential to what he wants to achieve?

Sir Keith Joseph: I am constantly paying tribute to the hard work, dedication and effectiveness of most teachers. I have stirred a finger to offer additional money in return for co-operation.

Mr. Radice: For next year.

Mr. Andrew F. Bennett: For next year.

Sir Keith Joseph: No, I have been offering it for the past year, in return for arrangements that would provide teachers with much better career and promotion prospects.

Mr. James Couchman: While I acknowledge that the entry pay for qualified teachers is not high, and that many teachers feel that they must take on administrative duties to enhance their top salary level, does my right hon. Friend agree that both parents and pupils will rightly feel dismayed at the breakdown of last night's talks, when they might otherwise have hoped that the new school year which begins in September would not be disrupted, especially pastoral and extramural studies?

Sir Keith Joseph: I entirely agree with my hon. Friend.

Mr. Guy Barnett: Is the Secretary of State aware that, as a consultant to the NUT, I have plenty of allies in the union, and, indeed, sufficient contact with teachers to know the measure of anger that they feel and


the degree to which teachers, including some of our best teachers, are voting with their feet? How often has the right hon. Gentleman met the teachers to discover those facts for himself?

Sir Keith Joseph: I am in the habit of accepting practically every opportunity given me to meet teachers. When I visit schools I always make plain my willingness to meet deputations of the staff. The hon. Gentleman should take account of the doubts expressed by some of my hon. Friends. Do all teachers know the shape of what the Government are offering? I wonder whether they do.

Johnson Matthey Bankers

The Chancellor of the Exchequer (Mr. Nigel Lawson): With permission, Mr. Speaker, I should like to make a statement. I told the House on 20 June that if further investigations into the affairs of Johnson Matthey Bankers were to turn up any evidence of fraud, appropriate action would be taken. Investigations have been continuing since then. Although, strictly speaking, they have not so far established prima facie evidence of fraud, they have revealed serious and unexplained gaps in the records of Johnson Matthey Bankers, including the possibility of missing documents relating to substantial past transactions on certain accounts that are the subject of large losses.
In the light of that, Johnson Matthey Bankers has today requested the Commissioner of the City of London police to conduct a preliminary inquiry with a view to establishing whether any criminal offences may have been committed. The result of the inquiry will be reported to the Director of Public Prosecutions, who will advise what, if any, further action should be taken. The House will, of course, be kept informed.

Mr. Roy Hattersley: The Chancellor of the Exchequer was wholly right to inform the House of this latest development in the Johnson Matthey affair at the first opportunity, and I thank him for that. Obviously, it is not possible to speculate about the outcome of the police inquiry—[HON. MEMBERS: "But."] It is, however, essential to clarify the procedure which now follows. Will the Chancellor of the Exchequer confirm that two prosecutions may now result from the unhappy affair: first, regarding the auditors, about which he told the House a month ago, and now Johnson Matthey Bankers? What is more, because of their mutual mismanagement, the Bank of England and the Government are involved in the whole episode. It grows increasingly difficult to answer the question why Johnson Matthey Bankers was bailed out in the first place, and so quickly.
Does the Chancellor of the Exchequer agree that the fullest revelation of all the facts is essential? Will he promise that after the police inquiries there will be a general inquiry into the whole Johnson Matthey Bankers' scandal, either by a Select Committee of the House or under the Tribunals of Inquiry of (Evidence) Act 1921?

Mr. Lawson: I am grateful to the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) for his initial welcome. He referred to the two matters which are now under way as if they are somehow similar. In fact, they are very different. There is the prospect of civil action by JMB, which is now a wholly owned subsidiary of the Bank of England, against the auditors Arthur Young McClelland Moores and Co. Secondly, there is the separate preliminary police inquiry.
The right hon. Gentleman asked why Johnson Matthey Bankers was bailed out. I gave a full explanation of that when I made my statement on 20 June, and the matter was covered fully in the annual report of the Bank of England. As for what might happen in future, I think that it is better at this stage to wait and see.

Sir William Clark: Is my right hon. Friend aware that his statement will be very welcome, so


that the whole affair can be cleared up once and for all? Does he agree that if the Bank of England had not intervened in the Johnson Matthey affair there could have been a loss of confidence in the City, which would have been detrimental to the invisibles sector of the economy?

Mr. Lawson: My hon. Friend is right. There were obvious dangers to the London gold market especially, which was a special and important feature of the case. It is striking how open the Government have been in revealing to the House details of this matter, in sharp contrast to what happened under the previous Labour Government during the lifeboat incident.

Mr. Richard Wainwright: Will the Chancellor of the Exchequer explain to the House why it is only now that he is able to tell the House that serious and unexplained gaps in the records have come to light, when various skilled teams of investigators have been engaged in the Johnson Matthey investigation over the past six months? How much longer does he think it will take possibly to produce prima facie evidence?

Mr. Lawson: The fact that the documents were missing was not established until quite recently. Since the Bank of England took over Johnson Matthey it has stopped further out-flows and has been working to establish the full extent of the bad debts, which I reported to the House on 20 June. It has been engaged also in getting Johnson Matthey Bankers back into a shipshape and saleable condition, so as to protect taxpayers' and the Bank of England's money and that of the indemnifiers. The inquiry is not the only matter in which the Bank of England has been engaged, but I am satisfied that it is diligently pursuing the inquiry with the aid of its advisers. I am sure that it is as anxious as the House to have a prosecution for fraud if any evidence of fraud should be found.

Sir Anthony Grant (Cambridgeshire, South-West): Is my right hon. Friend aware that the deplorable goings on at Johnson Matthey Bankers have caused the most acute embarrassment to many of my constituents who work successfully and honourably with the chemical division of Johnson Matthey? Will he emphasise that the two companies are quite separate, and in so doing wish every success to those who work in Johnson Matthey chemicals?

Mr. Lawson: I did so when my hon. Friend properly raised the matter on 20 June, and I gladly do so again now.

Mr. Dennis Skinner: rose—

Hon. Members: Hear, hear.

Mr. Skinner: Is the Chancellor of the Exchequer aware that if the Attorney-General had acted on 12 November 1984 when I asked him a question about the fraud squad's investigation of this matter there is a fair chance that some of the tracks that have probably since been covered up would have been found and explored thoroughly by the fraud squad?
The right hon. Gentleman will be aware that in the Crown Agents' affair very few people were trapped at the end because there was too long a delay. In the London and Counties Security scandal, Gerald Kaplan managed to get to America because of the delay. The result is that he has got off scot free. In other words, he has obtained an amnesty. If the right hon. Gentleman compares the Johnson Matthey Bankers' affair with the Slater, Walker fiasco, and all the others that arose at about that time, he

will find that most of those involved got off scot free. Against that background, is he not open to the charge that, because he has delayed matters and refused to answer my questions and those of my hon. Friends, people such as James Firth, a director, whose son was employed by one of the largest borrowers from Johnson Matthey, have been able to cover up all their tracks? The borrower is a personal friend of the Prime Minister and of the Secretary of State for Trade and Industry.
Is it not a scandal that the Chancellor has come to the House eight months after Johnson Matthey's exposure on 30 September? The result is that we will be lucky to get hold of any of the culprits, yet there are so many people to pick on. Why does the right hon. Gentleman not act against the Governor of the Bank of England? Why is the Governor not charged with the fact that he allowed so much neglect to take place? What about Michael Arnold, who worked for the auditors and apparently could not discover anything throughout 1984? One of those auditors is now in charge of looking after the NUM's funds. What a scandal this is.
Is it not a fact —

Mr. Speaker: Order. The House knows that the hon. Member for Bolsover (Mr. Skinner) has taken a special interest in this matter, but he must not make a speech.

Mr. Skinner: Is it not a fact that, by being so laggardly, the Chancellor and the Attorney-General, with the connivance of the Prime Minister, will allow these people to get off scot free while miners have been locked up in gaol for doing absolutely nothing?

Mr. Lawson: I resent and reject the hon. Gentleman's allegations. I had hoped that he would welcome my statement.

Mr. John Maples: Does my right hon. Friend agree that one of the most difficult decisions that a central bank has to make from time to time is whether to rescue a particular financial institution? It is, by contrast, extremely easy for the Opposition to cast doubt on those decisions in ignorance of the full facts.

Mr. Lawson: My hon. Friend is correct, but, strictly speaking, that is not the issue before the House. This is a serious matter. It concerns the fact that the Bank of England, through Johnson Matthey Bankers, has reached the point where sufficient suspicion has arisen through the missing documents to lead the Bank of England to feel justified in asking the City fraud squad to make a preliminary inquiry.

Mr. Robert Sheldon: Is it not clear that the rescue of Johnson Matthey Bankers, by comparison with a large number of firms which have been allowed to go to the wall, represents an error of judgment by the Chancellor? Does the right hon. Gentleman, agree that Johnson Matthey Bankers has shown itself to be the unacceptable face of capitalism, whereas the Chancellor's actions have shown themselves to be the unacceptable face of Government intervention?

Mr. Lawson: The right hon. Gentleman is wrong on both counts. First, the decision to rescue JMB was not my decision but that of the Governor of the Bank of England. Secondly, it was not an incorrect decision. In my judgment, the Governor of the Bank of England was correct in taking that decision.

Mr. Anthony Beaumont-Dark: Does my right hon. Friend accept that most of us will think that he was right to make this statement, because the invisible earnings of the City of London are important to our balance of payments? Does my right hon. Friend accept that what has happened at Johnson Matthey is a scandal which should be investigated, wherever it goes, and whatever its results? Bearing in mind the City revolution to come, the loss of confidence in the City by events such as the Johnson Matthey incident and the fact that Lloyd's has cast a great cloud over many people's views of the City's reputation, should not the same strictures be applied to Lloyd's, as a police investigation would bear heavily upon many people involved in some of the disgraces there?

Mr. Lawson: My hon. Friend will know that investigations into Lloyd's are going on. The prosperity and future of our people are threatened by the unacceptable face of Socialism. Whereas we are acting properly against what the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) called the "unacceptable face of capitalism", the unacceptable face of Socialism is publicly embraced by the Leader of the Opposition.

Mr. Brian Sedgemore: Is the Chancellor aware that Mr. Michael Hepker, the chairman of a public company, Sumrie Clothes Ltd., who today left the country, has been leading the Bank of England auditors, Graham Mark and Robin Collier, up the garden path ever since the collapse of Johnson Matthey in relation to a £1·5 million loan made to Ravensbury Investments, an offshore Isle of Man company, which loan involved a whole series of frauds, including a fraud on Johnson Matthey? Will the right hon. Gentleman confirm that on 29 June 1982 Eric Ellen, the director of the International Bureau of Maritime Fraud, went to see Ian Fraser, a director of Johnson Matthey, to tell him about various proven misdemeanours in which Mr. Mahmud Sipra, who controls the El Saeed empire which led to the collapse of Johnson Matthey, had been involved? Will the right hon. Gentleman confirm that, on 12 December 1982, he telephoned Mr. Fraser to tell him that Mr. Sipra was caught up in a £3 million fraud and that it was ridiculous to continue to lend him money, only to be met with the reply by Mr. Fraser, "You chaps are all the same. You don't give anyone a chance."? Will the Chancellor give a guarantee that he will come to the House next week, when I hope to present further details of fraud at Johnson Matthey?

Mr. Lawson: If the hon. Gentleman has any relevant evidence, I hope that he will immediately make it available to the police.

Mr. Eric Cockeram: Will my right hon. Friend accept that his assurance that if any fraud is uncovered the matter will be brought to the attention of the Director of Public Prosecutions is little comfort, in view of the repeated lethargy of that department? I remind my right hon. Friend that fraud at Lloyd's was uncovered more than 12 months ago, yet no action has been brought by the DPP.

Mr. Speaker: Order. Wide questions promote wide answers.

Dr. Oonagh McDonald: Is the Chancellor aware that his statement makes nonsense of the Prime

Minister's reply to me last Thursday, which was reinforced in her Monday letter to me, when she said that she saw no purpose in an inquiry into the relationship between Johnson Matthey and companies to which loans had been made? Does not everything that the Chancellor has said today underline the need for such an inquiry? What will the right hon. Gentleman do to shake the Prime Minister's complacency about Johnson Matthey?

Mr. Lawson: There is no question of complacency on the part of my right hon. Friend the Prime Minister, myself, any member of the Government or the Governor of the Bank of England. We have acted throughout on all the evidence that has been made available. It was impossible to act before there was any evidence. Now that further facts have come to light, the Bank of England and Johnson Matthey Bankers, without any delay, have called in the police, who will report to the Director of Public Prosecutions.

Mr. John Stokes: Disregarding much of what the Opposition have said, is my right hon. Friend aware that the honesty and integrity of the City of London is at stake? We look to my right hon. Friend to help us in every possible way.

Mr. Lawson: I agree with my hon. Friend that the honesty and integrity of the City of London are of the first importance. As I made clear in my statement of 20 June, it would be wholly wrong to assume that the shambles, and worse, at Johnson Matthey Bankers was in any way characteristic or typical of banking in the City of London. It does no good to this country to pretend otherwise.

Mr. Laurie Pavitt: Is the right hon. Gentleman aware that, apart from the large companies which were caught, a large number of small businesses are affected? I know of the tragedy of a small concern in Norfolk which had been built up over 30 years and which has gone to the wall. Does the Chancellor's announcement offer any hope that, after a lifetime of work, these small businesses will be rescued from bankruptcy?

Mr. Speaker: Order. That question has nothing to do with Johnson Matthey.

Viscount Cranborne: Now that my right hon. Friend has set such a good example in dealing with white collar fraud, can we expect him to encourage the responsible authorities to promote similar investigations into the Lloyd's insurance market?

Mr. Speaker: Order. That question is no good, either.

Mr. D. N. Campbell-Savours: May I ask the Chancellor to give an assurance that every penny of public money expended on rescuing that bank will be returned to the public purse before the company is again privatised? May we now have a copy of the Price Waterhouse report?

Mr. Lawson: As I made clear to the hon. Gentleman earlier, the Price Waterhouse report contains details which, because of the law relating to banking confidentiality, cannot be revealed. It also bears upon the legal action which the Bank of England and Johnson Matthey Bankers contemplate against Arthur Young McClelland Moores and Co. On the hon. Gentleman's point about money being returned before privatisation, the money that will be received by the Bank of England as a


result of the privatisation of Johnson Matthey Bankers will play an important part in the recovery of funds which have been expended.

Mr. Tam Dalyell: Did it come to the Chancellor's ears from around the gold market and elsewhere in the City before Christmas that there was a likelihood of fraud being involved? On what date, before or after Christmas, were Sir Robert Armstrong, the Prime Minister and the Chancellor warned of the likelihood of fraud in the Johnson Matthey Bankers case?

Mr. Lawson: I received no such warning at any time. The Bank of England discovered the documents to be missing last week.

Mr. Robert C. Brown: As it becomes increasingly apparant that a large sum of public money has been involved in fraud, will the Chancellor give the House an assurance that if, after the fraud squad's inquiries, the Director of Public Prosecutions reveals that the villians have fled, he will dismiss the Governor of the Bank of England, and resign?

Mr. Lawson: No, Sir.

Mr. Hattersley: Does the Chancellor agree that the exchanges of the past few minutes confirm the need for a general inquiry? At some point, must he not answer the question why, when my hon. Friends below the Gangway suspected fraud six months ago, the Bank of England suspected it only yesterday?

Mr. Lawson: The right hon. Gentleman's colleagues below the Gangway suspect fraud on every occasion, whether or not there happens to be any evidence of it.

Wages Councils

4. 11 pm

Mr. John Prescott: On a point of order, Mr. Speaker. The substance of the statement on wages councils which is about to be given to the House was reported in The London Standard at 2 o'clock this afternoon. I wonder whether you can say what rules govern these matters, because many Opposition Members read in the evening paper what the Minister was going to say.

Mr. Speaker: The House will be aware that I have the greatest sympathy with what the hon. Member has said. If statements which are embargoed are issued to the press, they should not be printed.

The Secretary of State for Employment (Mr. Tom King): indicated dissent.

Mr. Speaker: If they are embargoed, they should not be printed before the statement is given to the House.

Mr. King: Further to that point of order, Mr. Speaker. In case there is any misunderstanding, may I say that I share the feelings of the hon. Member for Kingston upon Hull, East (Mr. Prescott) about this matter. No embargoed statement was issued to the press. The House will have to draw its own conclusions as to whether there has been a leak. I take the strongest exception to leaks from my Department. I bitterly regret the fact that this has happened.

Mr. Prescott: Further to that point of order, Mr. Speaker. The Secretary of State has acted honourably in giving that statement. Will he look into the matter further and tell us later how the report occurred?

Mr. King: If I can, because I should dearly love to do so.

Mr. Speaker: Mr. King, to make his statement.

Mr. Tom King: With permission, Mr. Speaker. I should like to make a statement concerning the Government's intentions on the future of wages councils and on international labour convention No. 26.
As the House will know, I published in March a consultation paper on the future of wages councils. That canvassed two main options: either total abolition or reform of the system—including, in particular, the limitation of their powers and duties and the removal of young people from the scope of wages councils.
In addition to the report from the Select Committee on Employment, over 700 organisations and individuals responded to the consultation paper. While the TUC and individual trade unions favoured retention, the consultations confirmed that there is a widespread dissatisfaction among employers with the present wages council system. The majority of them favoured a range of substantial reforms to meet these concerns. I promised to inform the House as soon as the Government had taken decisions on those matters, following the ending of the consultative period.
The Government's overriding concern is to promote employment and to remove any excessive burdens on employers. The present system inhibits the creation of more jobs and that is especially true in the case of young


people. The present powers of wages councils also undoubtedly impose complex and unnecessary burdens on business. The Government believe that the case for radical reform is clearly made, and propose to introduce early legislation which will, first, remove all young people under 21 from any regulation by wages councils.

Hon. Members: Disgraceful.

Mr. King: Secondly, it will confine wages councils to setting only a single minimum hourly rate and a single overtime rate for those aged 21 and over.
I shall also be proposing new powers which will significantly simplify the procedures under which the Secretary of State may modify or abolish individual councils.
Following consultation, the Government have decided to deratify international labour convention No. 26 and I shall be informing the International Labour Organisation of our decision within the next few days. The window for denunciation opened on 14 June and it is necessary to give 12 months' notice before the convention ceases to apply. That will therefore mean that, subject to the progress of the necessary legislation in this House, it should be possible to bring into effect changes approved by Parliament as soon as they become law.
My right hon. and noble Friend the Minister without Portfolio, supported by my right hon. Friends and myself, published yesterday the White Paper, "Lifting the Burden". That set out clearly the Government's determination to reduce burdens on business and to seek in every way to improve the prospects for jobs. This statement today of a major package of reforms is directed to precisely those objectives, and I commend it to the House.

Mr. Prescott: It is both deplorable and ironic that two statements made to the House today should involve the ever-increasing greed of some of the City wealthy within our society and wages councils. The statement on wages councils represents an unashamed renunciation of Britain's international obligation to maintain minimum protection for the lowest paid in Britain, of whom I have employment experience.
Why does the Secretary of State disagree with the conclusions drawn by his predecessor, the right hon. Member for Waveney (Mr. Prior), who, as we are aware from a leaked Cabinet document from 1982, bitterly opposed such mean measures because they would marginally increase the number of jobs at the expense of adult workers and would be portrayed as an attack on those who are particularly vulnerable?
Does the Secretary of State accept that Britain is the only one of 92 civilised countries which is now prepared to renounce its international obligations? The Government's renunciation of the fair wages resolution in 1983, as the evidence presented to the Select Committee on Employment showed, led to a 25 per cent. reduction in wages, holidays and conditions and fewer jobs. Does he accept that some protection is necessary to guarantee minimum holiday periods and paid weekend overtime, as the all-party committee on Sunday shopping recommended that those conditions should be an essential part of any implementation of Sunday shopping? How will these proposals affect that recommendation?
In his statement, the Secretary of State claimed that his proposals would increase jobs. What evidence does he have to support that statement, as he confirmed to the Select Committee only a month ago that he had no such evidence?
As the Secretary of State must know, many of the 2·75 million people covered by the wages councils are women in very low-paid jobs, often earning sums below the supplementary benefit level. What estimate has he of the increase in the family income supplement benefits, which will grow with the downward pressure on wages that the decision is designed to achieve?
In International Youth Year, the Government's contribution is to remove legislation that is covered by international convention. It will mean less pay, shorter holidays and greater exploitation of youth labour by funnelling YTS youngsters into lower-paid industries. It will reduce the unemployment figures by replacing them with low-paid women workers, who will not be eligible to register as unemployed. It is a squalid proposal, consistent with the Government's overall policy of making the wealthy wealthier and the poor poorer, and there is no evidence that it will produce extra jobs.

Mr. King: In his opening comment, the hon. Member complained about a leak from my Department. He then boasted of another leak. I object to all leaks from my Department.
Anyone who has begun to understand the operation of the wages councils will know of the complexity of the orders. They are a major burden on employers. Many of the problems of the present system—and what are alleged to be breaches of it—arise from the sheer complexity of the orders.
We are determined to encourage employers to give the best possible opportunity to young people. We believe that the proposal will help in the employment of young people. That is why we attach importance to it.

Sir Ian Gilmour: Although I believe that the wages councils are marginal to the problem of unemployment, I congratulate my right hon. Friend on proceeding by way of a sensible improvement of the wages councils, rather than by way of abolition, which would have been a grave mistake.

Mr. King: I note what my right hon. Friend says and I understand his point. I believe that our package of proposals is a sensible way to proceed. We attach the highest importance to the creation of new jobs. I may disagree with my right hon. Friend as to the extent to which our proposals may help to reduce unemployment.

Mr. Ron Leighton: Is the Secretary of State aware that the removal of young people from the protection of wages councils is based on prejudice, not evidence? Youth wages have declined markedly, both relative to those of adults and absolutely, since 1979, yet youth unemployment has risen disproportionately faster.
Does the Secretary of State know that the young workers scheme—a device to lower youth wages—was singularly ineffective in providing new jobs? Does he realise that, if there is an increase in the employment of young people because of their cheapness, it will be at the expense of adults? Does he realise that that will be additional evidence to young people that the Conservative party is their enemy?

Mr. King: I do not accept the hon. Gentleman's last point.
There is clear evidence that, if the wages of young people were more sensibly related in percentage terms to the adult rate—as they are, for example, in West Germany—a number of additional jobs would be created. At the moment, it is impossible in many areas for employers to employ young people of 16 and 17 at 50 per cent. or 60 per cent. of the full adult wage rate. In West Germany, the percentage of the adult wage may be between 15 and 25. My concern is to see the creation of openings and opportunities for young people. When their wages are artificially high, it simply ensures that there are no jobs for them.

Sir William Clark: Will my right hon. Friend agree that in many respects over the years the wages councils have outlived their purpose? Indeed, they have inhibited new employment and the creation of more wealth.
It is acceptable that young people under 21 should be exempt from the wages councils, but will my right hon. Friend keep under constant review the effect of the revised wages councils provisions on those over 21, and if necessary increase the age limit?

Mr. King: I give an undertaking that we shall keep these matters under review. The modification or abolition of individual wages councils is an important component in my proposals.
My hon. Friend will have noted my comment that the majority of employers within the wages council areas favour reform. Account should be taken of that fact.

Mr. David Penhaligon: Is the Secretary of State aware that, while many may recognise that there is some logic in paying the adult rate at 21 rather than at 18 or 19, the removal of all protection from those under 21 will be seen as outrageous? It will permit exploitation of one of the most vulnerable sections of our society. The whole concept of wages councils was to protect the vulnerable.
Given what is proposed by the Secretary of State, will he say why it was decided to deratify? As I understand international labour convention No. 26, the Government could probably stay within it, even given the proposed changes in the wages councils. What does the Minister see as the advantages of deratification, other than being able to abolish the lot at a later date?

Mr. King: I draw the hon. Gentleman's attention to a slightly bizarre feature of the ILO procedure. He said that the changes would "probably" come within the convention. Obviously, we have to ensure that we act entirely in accordance with our international obligation.
Under the ILO system, one has either to give notice now, while the window is open for a year, or for five years one has no opportunity to make any change whatever. In an area that is important for domestic policy-making, it is essential that we should have the opportunity to determine the policy ourselves.
The greatest area of vulnerability for those under 21 is unemployment. I am putting forward proposals to give them the best possible chance of jobs.

Sir Peter Hordern: I congratulate my right hon. Friend on bringing forward the proposals. Do they include the agricultural wages council? What is to become of that council?

Mr. King: My hon. Friend is referring to the agricultural wages board, which is dealt with under a separate convention. My right hon. Friend the Minister for Agriculture, Fisheries and Food has already made a separate statement about that.

Mr. Frank Field: Is the Secretary of State aware that thousands of my constituents will regard the Government's statement as offering them a prospect of poverty on benefit or poverty on low wages?
Will the Secretary of State come with me to Merseyside jobcentres, where he will see jobs advertised at £1·20 an hour, £1 an hour, £57.25 a week, and some at princely sums of £70 and £91 a week?
Will the Secretary of State now withdraw his policy of trying to reduce money wages, and for the first time as a Government spokesman bring proposals to the House aimed at raising real wages?

Mr. King: I was on Merseyside on Friday, as the hon. Member may know. His point refers to the present situation. I am not sure whether he is suggesting that my proposals will change it in a significant way.

Mr. George Walden: Is my right hon. Friend aware that many of us will support his proposals, not because they appear to be a compromise—which is no doubt how they will be represented in the press—but because they satisfy the two main concerns at the forefront of our minds, jobs for the young and protection of workers where that is most needed?

Mr. King: I believe that that is right. I believe that small businesses have the potential to be and will increasingly be the source of more jobs. The burden of cost and compliance with the regulations is a major constraint on further employment, and that is the issue to which we give the highest priority.

Mr. Don Dixon: Does the Secretary of State realise that his proposals will not create one job, and that many unscrupulous employers will sack those over 21 and replace them with youngsters under 21 at lower wages?
Is it not ironic that the Secretary of State for Employment should make a statement attacking those at the bottom of the wage scale when his colleague, the Chancellor of the Exchequer, has just made a statement about the fiddlers at the top?

Mr. King: I do not agree with the first comment of the hon. Member. This measure will mean the creation of more jobs. A number of cases are being reported to my Department about young people being dismissed because they have been offered jobs that they are willing to accept at wages which the employer can afford. Inspectors are then saying, "You are not allowed to accept that job." I can recount those instances to the hon. Member. That is an intolerable situation and one which this House should not countenance.

Mr. Nicholas Budgen: Is my right hon. Friend aware that all comfortable and respectable opinion will congratulate him on his statesmanlike fudge? The only people who will regret his decision are the weakest and the poorest, who will continue to be priced out of work until these councils are abolished.

Mr. King: I note the characteristic question of my hon. Friend. This will be of real help to young people in giving


them a better chance of avoiding the ultimate degradation of unemployment. It will give them the chance of jobs, and I attach great importance to that.

Mr. J. D. Concannon: What protection can the Secretary of State offer if, as has been said, a person's 21st birthday becomes the date of his sacking? Is the only redress a young person will have on his 21st birthday the unfair dismissals legislation? If that situation comes about, will the Secretary of State review the policy he is pursuing today?

Mr. King: I do not accept the scenario painted by the right hon. Member. He knows the situation which exists now and knows very well that in this country young people's wages have got out of phase. The evidence I am about to give may be obtained from the Electrical Contractors' Association and the EETPU. An agreement there reduced the wages of first-year apprentices from £42 to £28. As a result, the number of apprentices in that industry trebled.

Mr. John Gorst: I congratulate my right hon. Friend on proceeding by way of reform rather than abolition. Could he give an assurance that, if abuses or hardships are brought to his notice, he will act swiftly to deal with them?

Mr. King: As instanced by the hon. Member for Birkenhead (Mr. Field) there are problems in the present situation. We wish to ensure that we have a system in which employers recognise their responsibilities, and in which we create the maximum number of jobs at wages which employers can afford and which employees are willing to accept. That is our objective in tackling the problems of unemployment. We will obviously keep a close eye on the situation as it develops.

Mr. Ken Eastham: Is it not a fact that poverty wages have a direct effect on people's life cycle? The Minister referred to apprentices' rates of pay, but that has nothing to do with wages councils. The rates are negotiated with the trade unions. On occasion, the Minister has quoted the United States of America as not having wages councils, but is it not a fact that the United States has a minimum wage, which is higher than that recommended in the United Kingdom?

Mr. King: I used the illustration of apprentices because it is the clearest possible illustration of the principle. I know perfectly well that apprentices are not covered by wages councils. I am seeking to make the point that, when the wages of young people are fixed at an economic level, it is likely to lead to more jobs. The hon. Member referred to the problems of poverty. The question from the hon. Member for Kingston upon Hull, East (Mr. Prescott) was about state support, for instance in the form of family income supplement. What we must not do is confuse the two issues.

Mr. Nicholas Lyell (Mid-Bedfordshire): Is it not clear from the comments of Opposition spokesmen, both official and alliance, that they recognise that these measures will help young people price themselves into jobs? Is it not also clear, and will my right hon. Friend confirm, that the recommendations of the Auld report on the deregulation of Sunday trading, are still available as an option?

Mr. King: The Auld report made recommendations about the retention of wages councils and about the setting of minimum wages. Those matters will need to be considered in whatever legislation comes before this House. I am surprised that the Opposition do not accept what is now widely perceived, that wage rates for young people—even though they have fallen back, as the hon. Member fairly said—are still significantly higher than, for instance, in Germany. It is interesting to note the much higher level of youth employment in Germany as a result.

Mr. Kevin Barron: In answer to a question put by me on 11 June 1985, asking whether the Department was thinking of attacking the minimum wages paid to people under 21 years of age, the Under-Secretary of State, the hon. Member for Eltham (Mr. Bottomley), said no. Can the Minister tell us why his Department has changed its mind in that time, as I suggest it has? The Minister misquoted an agreement with the Electrical Contractors Association about trainees, but that has nothing to do with wages council industries. What evidence does he have that cutting this vital protection for people under 21 will help? In most of the areas we are talking about, people work for £1 an hour; we are not talking about anything lavish. What evidence can the Minister give us that he is going to do anything other than attack low wages and bring them down to YTS levels? I am sure that that is the thinking of this Government.

Mr. King: I am sorry that the hon. Member will not accept the clear illustration I gave. He probably knows, for example, that Ford apprentices in this country are paid twice as much in their first year as Ford apprentices in Germany. There are many more apprentices in Germany. The principle is that an employer fixes wage rates for starting people who in their first years of work make only a limited contribution to the performance of the business. He will not offer them employment if wage rates are fixed at a level way beyond what they are worth.

Mr. Gerald Howarth: I welcome my right hon. Friend's recognition that the reform of wages councils will create more jobs. Will he not accept that the abolition of wages councils would increase job opportunities even further? Will he not therefore go further than he is going today?

Mr. King: As I said a little earlier, we took the consultations very seriously. It was significant that a sizeable majority of employers preferred reform and preferred to keep the wages councils. It is important that young people should be exempted and we are also taking these alternative powers to deal with the problems of individual councils. However, we will keep the matter under review.

Mr. Robert C. Brown: How can the Minister seriously suggest that those over 21 need minimum wage protection while those under 21 are to have this protection abolished by law? Is the Minister aware that, in conventions on human rights, this nation is now the pariah of the 21 nations of the Council of Europe? If we depart much further from democracy, our right to be a member of the Council of Europe will be seriously challenged.

Mr. King: I do not know what on earth the hon. Member bases his last assertion on. We are not proposing to introduce universal rights for all those over 21. We have


consulted all the industries covered by wages councils, and they favour reform. There is an urgent need in the case of young people, and we intend to look individually at the other councils.

Mr. Alan Howarth: I congratulate my right hon. Friend on the thoroughgoing reform which he has announced, and for refusing to be swayed by the unimaginative and heartless advocates of the Opposition. Does he agree that it is quite wrong to present an issue in terms of the withdrawal of protection for young people, when the reality is that wages councils have all too often laid down minimum rates of pay for young and inexperienced people at levels above those which employers can afford? That has been one of the causes of the present serious problem of unemployment.

Mr. King: I suspect that I am not the only Conservative Member who is nauseated by those who preach about the problems of unemployment but will not face up to some of the tough decisions that must be taken, and do not realise what is really happening. I hope that when we see the improvements that will be made by this measure, even some Opposition Members will recognise its merits.

Mr. Robert Maclennan: How many of the industrialised countries with which we are in competition have found it necessary to denounce ILO convention No. 26? If we are out of line, is it because the Government's policy on minimum wages has failed, or because their policy on the employment of the young has failed?

Mr. King: As the hon. Member may know, the ratification of ILO conventions is extremely complex. Several countries ratify very few. The United States, because of its federal structure, has ratified few, if any. We have ratified rather more since we came into office, and have deratified only two. Labour Governments deratified ILO conventions. We shall consider them practically and pragmatically.

Mr. Tony Baldry: Is my right hon. Friend aware that many will conclude that the Government have found exactly the right balance between protecting the interests of the weak and lower paid and ensuring that wages councils do not inhibit the creation of new jobs? Does he further agree that it is right to take younger people out of the remit of wages councils, since in this area they have inhibited the creation of new jobs by setting too high wages? It is right to set simple, single adult rates, because wages council orders are far too complex—often running to 30 pages—for employers or employees to understand, and are thus self-defeating. Many will conclude that, after the widest possible consultations, the Government have come to the most sensible conclusion.

Mr. King: I am grateful to my hon. Friend. I know of his close interest in the subject and the work that he has done. I hope that the drastic simplification of the operation of wages councils—previous studies of orders show how complex they have become, especially for smaller employers—will assist in the creation of new jobs.

Mr. Andrew F. Bennett: Does the Secretary of State accept that, in commending wages council legislation to the House, Winston Churchill made the fundamental point that the good employer is undercut by the bad employer and that the bad employer is undercut by the worst employer? That was why wages councils

were needed. What evidence does the right hon. Gentleman have to show that Winston Churchill's recommendations were wrong? Does the Secretary of State want youngsters to be employed only by the worst employers?

Mr. King: If the hon. Gentleman had made more than a superficial study of the position, he would have known that Winston Churchill set up trade boards, which were mostly concerned with health and safety. They are now covered in separate legislation. The trade boards dealt mainly with manufacturing industry, whereas the wages councils cover mainly hotels and catering, the retail trades and part-time workers, including many women. The Government at that time were anxious to prevent sweating, as it is called, which is now covered by separate legislation. It is a different matter.

Mr. Ray Powell: Will the Minister let us know the total number of young people who will be affected by the measures? Will he also remember that many shop workers, who are still not covered by wages councils, are young? What protection will he give to them? The Minister talked about sweatshops. In Ogmore, 8,000 people are unemployed, 1,000 of whom are youngsters aged under 21. What protection will he give to those who are working in the sweatshops that are mushrooming in my constituency and in Wales generally?

Mr. King: I thought that the hon. Gentleman said that they were unemployed, but I may have missed the point. Obviously, I cannot give the hon. Gentleman the figure. We believe that the measures will lead to increased job opportunities for youngsters, but it is impossible to predict how many will be affected.

Mr. Peter Thurnham: In welcoming these partial steps, may I ask my right hon. Friend to remember, when considering each industry, the advantages of abolition, especially for 20-year-olds, who might celebrate their 21st birthdays by getting the sack?

Mr. King: I understand my hon. Friend's point but, considering the earnings in those areas, I hope that that will not be the case. The new measures will help to avoid the obvious anomalies, where employers who wish to employ more young people cannot do so because they are required, for example, to pay a 16-year-old who has never worked 50 per cent. of the full adult rate. That cannot be justified, and we must tackle the problem.

Mr. Michael Foot: Since the right hon. Gentleman is content to lower standards and wages., especially for the young, does he believe that it is a good idea for other countries to follow our example? Does he not understand why those conventions were signed? Is it not disgraceful that Britain should be at the head of a drive to lower standards?

Mr. King: The right hon. Gentleman has heard all the exchanges on this matter, yet he appears to have paid no attention to the points that have been made. How can it be a positive benefit to any youngster to fix wages, in relation to adult rates, at twice the rate paid in Germany, if the result is that British youngsters are unemployed while German youngsters have jobs?

Mr. Spencer Batiste: Can my right hon. Friend confirm that he has received many representations from industries involved with wages councils advocating


their retention, but the removal of the damaging side effects that have built up? Is he aware that the skilful balance of measures that he has announced this afternoon will be widely welcomed by those who are genuinely concerned about job creation and increased training prospects for the young, although it will not be welcomed by those who weep crocodile tears and have no constructive alternatives to suggest?

Mr. Prescott: Twenty pounds a week—that is what it means.

Mr. King: I am grateful to my hon. Friend, who put the point better than I have succeeded in doing so far. I genuinely believe that we can help young people in this way. There is no merit in artificially preserving rates of pay which ensure that no one obtains employment.

Several Hon. Members: rose—

Mr. Speaker: Order. I know that this a matter of great interest to the House, but we have a heavy day ahead of us. I shall allow questions to continue for 10 minutes, and I hope that everyone can be called.

Mr. Michael J. Martin: As a former trade union officer, I know that many people in the catering trade work long hours, and that many youngsters in that trade are mentally and sometimes physically handicapped. They know nothing but hard work, and they are entitled to the protection of the Government. What will the right hon. Gentleman do to ensure that such youngsters are not exploited?

Mr. King: The hon. Gentleman raises a serious point about handicapped people, which no doubt will arise when we discuss the legislation.

Mr. Michael Forsyth: Does my right hon. Friend agree that wages councils discriminate against the handicapped, ethnic minorities and young people, and that his proposals will be a fillip for them? Does he agree that the Opposition have shown that they can offer nothing to the young unemployed, and that they are happier to respond to the needs of their bosses in the trade unions than to tackle these fundamental problems?

Mr. King: I very much agree with my hon. Friend. The hon. Member for Glasgow, Springburn (Mr. Martin), who is an experienced trade union official, will know that there is a real problem here, which we must consider. The operation of wages councils can inhibit the employment of disadvantaged people who, above all, want the respect and responsibility that comes from employment.

Mr. Greville Janner: While recognising that the Government's proposals are part of the continuing process designed to strip those who are fortunate enough still to have jobs of basic minimum legal protection, may I invite the Minister to set out his proposals for the next stage in the process? Since he has decided to simplify the method of introducing regulations to abolish wages councils, thereby depriving the House of its normal procedures, and following the quadrupling of the qualifying period for unfair dismissal protection, can he say which councils he intends to abolish? Or will he not tell the House even that?

Mr. King: The hon. and learned Member, with his expert legal knowledge, has raised a number of points

which will arise if legislation comes before the House, as I certainly hope it will, and which we shall need to debate. My concern today was to set out the main framework at the earliest opportunity, as I promised the House I would. That I have done. I do not wish to pursue further the line which the hon. and learned Gentleman invites me to travel.

Mr. Conal Gregory: Does my right hon. Friend share my incredulity at the comments made by the Opposition in connection with a number of the councils such as the ostrich and fancy feather and artificial flower council, and the need for them? May I draw to his attention the fact that the Dutch Government introduced the young person's level of 23 and that, by considering reform along those lines, we will increase Britain's greatest growth industry, tourism? There will be delight, particularly in tourism circles in Yorkshire, that, as a result of these measures, some 60,000 to 70,000 jobs a year will be created.

Mr. King: I certainly accept what I think is a very important point. If we are considering future sources of employment, the scope for tourism is very significant. I hope that we may soon have something more to say on this.
The age level is obviously a matter of judgment. I took the view, after full consideration, that 21 was the right age. I have no doubt that that matter will be debated fully when we come to consider the legislation.

Mr. Derek Fatchett: Given that the Government's case depends on their argument that low wages will produce more jobs for young people, can the Secretary of State explain why the highest levels of unemployment for young people are found in those regions with the lowest wage rates for young people and the lowest levels of unemployment for young people are found in those areas with the highest wage rates for young people?

Mr. King: A number of other factors—not least the concentration of traditional industries and the scale of problems which have affected some of those industries—also dominate those issues.

Mr. Christopher Chope: My right hon. Friend's announcement today will be widely welcomed, because it will create many new job opportunities for young people. It will give young people the freedom to negotiate their own wages. I wonder why my right hon. Friend is denying this freedom to those who are over 21 and whether, in the light of the White Paper issued yesterday, he will consider excluding from the provisions of the wages councils all those employed by small businesses.

Mr. King: I understand that point. I think that the balance which I have tried to strike is the right one, and I commend it to the House. But I have no doubt that all these issues of detail will be a matter for discussion in the progress of the legislation.

Mr. Max Madden: Why do the Secretary of State and his Government seem to regard being young as an illness? Does the Secretary of State understand that he is going to have a very tough time persuading young people that he is doing them a good turn by cutting their pay and reducing their conditions of employment?

Mr. King: I am amazed that the hon. Gentleman is prepared to defend the system when he knows perfectly well that, by historical accident and sometimes by negotiation, wage rates for a number of young people are fixed at levels which simply are not economic and at which, therefore, there are not jobs. I will recommend as firmly as I can a system that will give encouragement to jobs and will give the best possible oppotunities to young people by employers being able to offer them employment. At the start of their working life, when they are not able to make a significant contribution to the firm, employers are willing to give them a chance, provided that the level of pay is one which a company can afford.

Mr. Matthew Parris: How is it possible for the Opposition to argue that abroad low wages create jobs because they give foreign manufacturers the edge over ours, yet those mechanisms do not apply at home?

Ms. Clare Short: We have low wages.

Mr. King: The truth is that, as the hon. Lady the Member for Birmingham, Ladywood (Ms. Short) says, we have low wages and low productivity and we then jack up the wages of young people in a quite unreal relationship to the wages of adults. As a result, we tend to have the worst of all worlds. It is to amend that situation that I bring these proposals to the House.

Mr. Stuart Bell: Is the right hon. Gentleman aware that in the the northern region high unemployment and low wages go hand in hand, and that, since 1979, unemployment has doubled in the manufacturing sector, with 250,000 able-bodied men and women on the dole? In addition, 440,000 workers are on less than the decency threshold which was worked out by the Council of Europe. Is he aware that in my constituency there is one street in which 90 per cent. of the people are unemployed? Can he tell the House where in his announcement today there is any message of hope, expectation or a lifting of morale for those people?

Mr. King: The hon. Gentleman will know that we have taken a number of measures, concerned with improving training opportunities, work programmes for the unemployed and the help which we can give them in a range of different ways. We are determined to take every step which may help to open more employment opportunities. We are starting now to create more jobs, but not fast enough to bite into the levels of unemployment. However, we are on our way, and we will continue to take steps which will genuinely help employment opportunities. I know that the hon. Gentleman comes from a difficult area which has tragic problems, but we will face up to those problems and we will take the steps which we genuinely believe can help.

Mr. Martin M. Brandon-Bravo: May I join those who welcome the policy of reform rather than of abolition? However, are we right to choose some arbitrary age to distinguish between adults, skilled and otherwise? I am concerned about late entrants into an industry. It might be far better for an industry to be able to have a say in defining what is adult—for example, after three or four years of experience in an industry. That may be of greater practical significance than choosing the age of 21 or even 23.

Mr. King: I hear what my hon. Friend says, and I respect his close knowledge of one of the industries concerned in this area. It is, of course, important for the House to keep in mind that what we are talking about here is simply the minimum rate. It is open to industries to make alternative arrangements within that framework. It is the basic flaw in the situation with which we are concerned.

Ms. Clare Short: Is the Minister aware that we on the Labour Benches are nauseated by Tory Members with two or three jobs, earning £25,000 a year plus, talking about cutting the pay of young people who earn £35 a week and adult workers who earn between £63 and £75, many of them working for supplementary benefit rates? The Minister is not entirely honest with the House. His party has for a long time been determined to cut the wages of young workers. The Government therefore introduced a scheme called the young workers scheme, whereby they subsidised employers at the rate of £15 per week to cut young people's wages. The scheme failed completely, and is about to be abolished. A report of the Select Committee on Public Accounts found that 77 per cent. of the subsidised jobs would have existed anyway, and the vast bulk of the other jobs were jobs taken from adults. The Minister knows that cutting youth wages will not create more jobs.
The House should also note that, although the brunt of the attack is on young people, there is also an attack on low-paid adult workers. That means mostly women and black workers. The provisions to pay only for a single hourly rate and one rate of overtime result in no protection for holidays, no protection for piece-rate workers and no minimum rate, so that a worker can be sent home any day of the week if there is not enough work. The attack is upon all the protections of some of the poorest and most vulnerable in society. The Government are inspired by a future in which Britain will compete with some of the cheapest lowest paying sweatshops of the world The Opposition believe in a high-wage, high-skill, high-investment economy. We reject this statement, on the grounds of social justice and economic efficiency.

Mr. King: The hon. Lady says that she believes in all those things. A better recipe than her approach for destroying more jobs more quickly it is difficult to imagine. How can she make these accusations and allegations when she knows perfectly well that I have already referred to the relationship with Germany? Why is it that in Germany it is not thought unacceptable to have sensible and economic levels for young people? That economy is not seen as a low-wage, low-tech, low-skill economy; it is seen as a sensible way to get young people in with a better chance of training and a better chance of a job. That is what we are embarked upon. The distortions and allegations which she makes have no part in our programme.

Later—

Mr. Michael Brown: On a point of order, Mr. Speaker. At the beginning of the statement made by the Secretary of State for Employment, the Opposition shadow employment spokesman, the hon. Member for Kingston upon Hull, East (Mr. Prescott), raised a point of order with you about the statement being made in the House before being given prominence elsewhere. Is it not extraordinary that, after raising that


point of order, the hon. Gentleman did not have the courtesy to listen to the remainder of my right hon. Friend's statement?

Mr. Speaker: That is patently not a matter for me.

Civil Servants (Assistance to Members)

Mr. Donald Coleman: On a point of order, Mr. Speaker. In the course of the debate on the Welsh rate support grant last evening, my hon. Friend the Member for Ogmore (Mr. Powell) raised with Mr. Deputy Speaker the fact that the hon. Member for Ynys Môn (Mr. Best) was seen to be obtaining information from the civil servants box at the back of the Chamber, although that hon. Gentleman is neither a Minister nor a Parliamentary Private Secretary.
At that point, Mr. Deputy Speaker ruled, quite properly, that it was not a matter for his concern because the people in the officials' box were outside the Chamber. We accepted his ruling, although it was clear that an attempt had been made by the hon. Member concerned to seek privileges over other hon. Members. May we have your guidance, Mr. Speaker, as to the propriety of the hon. Gentleman's action?

Mr. Speaker: I am aware of the incident that was raised with Mr. Deputy Speaker last night. and I am grateful to the hon. Member for Neath (Mr. Coleman) for giving me notice of his intention to raise it today, because that has enabled me to look into it with great care. Departmental officials are admitted to the box behind the Chair so as to be available to Ministers.

Mr. Ray Powell: It was I who raised the point of order last night, when Mr. Deputy Speaker informed me that there had been no infringement of the rules of the House. It was obvious that civil servants in the box were giving documents to the hon. Member for Ynys Môn (Mr. Best).
I understand that that hon. Member was informed that this point of order would be raised, and I appreciate that his absence may mean that he is engaged elsewhere. The fact that he has been informed means that my hon. Friends and I are not raising the matter without his knowledge.
When I approached the officials' box—as I told Mr. Deputy Speaker that I would—to ask for some information that I wanted regarding the situation in the Ogmore constituency and in Mid-Glamorgan, I was handed a copy of the supplementary rate support grant report which I already had, and the officials would not furnish me with any other information. They told me that they were available to give information to hon. Members other than Government Back-Benchers. If that information is correct and we can all approach the box for information, I need not have raised the point of order in the way I did last night, and I would not be raising the issue again today. However, I take it that the ruling is that the officials in the box are available only to advise Ministers.

Mr. Speaker: I have nothing to add to what I have said. It is a question for Ministers and not for the Chair.

Social Security

Mr. Michael Meacher:: On a point of order, Mr. Speaker. As you are no doubt aware, authoritative information has been made public today, based on leaked documents, giving the numbers of gainers and losers under the social security Green Paper and the amounts of their gains and losses, largely losses. It shows that the number of losers is in excess of 8 million, including 600,000 of the poorest on supplementary benefit, and that their total losses are about £1 billion.
Ministers, including the Prime Minister, have repeatedly said that the information is not available now, before the April 1987 uprating. These documents, which have been seen and copied, reveal that Ministers have repeatedly misled the House.
Will you, Mr. Speaker, use your good offices to ensure that a statement is made at the earliest opportunity by the Secretary of State for Health and Social Security, so that hon. Members in all parts of the House may have an opportunity to question him on essential information the existence of which he cannot deny and which should have been made available at the outset, when he made his original statement on 3 June?

Mr. Speaker: The hon. Gentleman is raising matters which are for Ministers and not for the Chair. It is not for me to call Ministers to make statements. That is a matter for the usual channels.

Mr. Alan Williams: Further to that point of order, Mr. Speaker. My hon. Friend the Member for Oldham, West (Mr. Meacher) was not asking you to force Ministers to make statements. He was pointing out that until now the House has been misled by being told by, among others, the Prime Minister that the information was not available. He was—

Mr. Speaker: Order. Nor is that a matter for me. It is for the Government.

Mr. Jeremy Corbyn: Further to the point of order, Mr. Speaker. The Prime Minister and other Ministers have consistently denied the existence of documents relating to the cost of the social security reviews. Proof has now emerged that such documents exist. Is it not incumbent on the Government to present those documents to the House in the normal way in the form of a statement?

Mr. Speaker: That is a matter for them, not for me.

Mr. Andrew Faulds: Further to that point of order, Mr. Speaker. We have a requirement in the House that no hon. Member is allowed to accuse another hon. Member of lying, and it is proper that we should have that arrangement. However, it poses problems for hon. Members who wish to comply with that reasonable proposition when there is a clear case, as in this instance, the occupants of the Government Front Bench, including the Prime Minister, have been less than honest with the House of Commons. How are we to pursue these matters when it is clear that we cannot make the accusation, yet the accusation would be absolutely valid?

Mr. Speaker: There are plenty of opportunities at Question Time and at Prime Minister's Question Time.

Mr. Alan Williams: Further to that point of order, Mr. Speaker. My hon. Friend the Member for Warley, East (Mr. Faulds) has touched on an important point. You say that there are plenty of opportunities when hon. Members can raise issues such as this, Mr. Speaker, but we shall go into recess in a week's time and will not return until the end of October. Apparently the information is available. The Government have refused to present it to the House and have actually denied its existence. May we have an assurance from the Leader of the House that a statement will be made before we rise for the summer recess?

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): No assurance can be given, but I suggest that we might look at the matter through the usual channels.

Racial Harassment

Mr. Harry Cohen: I beg to move,
That leave be given to bring in a Bill to create an offence of racial harassment; to place a duty on a landlord to seek eviction of a tenant who is convicted of such offence if it is committed against another tenant of that landlord; to provide for the right of appeal against eviction and against proposals for rehousing; to place a duty on landlords and local authorities to provide information on the rights and duties in relation to racial harassment; to make provision for investigation of complaints and for a code of practice; and to make provision for compensation of victims.
This important legislative step is designed to tackle the problem of racial attacks in and around people's homes. The need for such legislation is highlighted by the tragic deaths in Ilford last Saturday, when Mrs. Shamira Kassam, who was eight months pregnant, and her three small children died in an arson attack on her home. The evidence strongly points to racial motivation. Petrol was poured through the letter box—

Mr. Neil Thorne: rose—

Hon. Members: Sit down.

Mr. Cohen: Petrol was poured through the letter box three weeks earlier; there was an attack on the same property three years previously, when it was occupied by a different Asian family; and across the road, done by a Fascist organisation, was obnoxious, racist graffiti. Under my Bill, the police would have been under a statutory duty to investigate the previous arson attacks and the incident of the graffiti as racially motivated crimes.
These horrendous and needless murders, to society's shame, cannot be treated as an isolated incident. There has been a steady increase in the number and intensity of incidents of racial harassment. Sir Kenneth Newman, in his June report about the situation in London, pointed out that the number of reported cases of racist attacks went up by over 18 per cent. in 1984, whereas the crime rate generally went up by 9 per cent. We know, moreover, that many cases are not reported to the police, either for lack of confidence in the police or for fear of reprisals.
Most of the victims are Asian of Afro-Caribbean. The official Home Office report of 1981 found that the incidence of racial victimisation of Asians was 50 times higher than for white people, and for Afro-Caribbeans it was 36 times higher. The Policy Studies Institute's report, "Black and White Britain, 1984", considered that the Home Office may have underestimated the incidence of racial attacks by as much as 10 times.
Police perception of and reaction to these attacks is mixed. There is an inconsistency in their recognition of the racial motivation for such crimes and in the speed and type of their response to them. For example, they often exhibit scepticism and even hostility to the victims. They arrive late at the scene of the crime and end up simply advising victims to pursue private prosecutions.
However, there is a slow realisation of the extent of the problem. Mr. Robert Bunyard, chief constable of Essex, is quoted in The Times on 7 June 1985 as saying:
ethnic minorities live in dread.
The police, media and politicians may have been wrong to dismiss such problems and people's fears as trivial when they are not. Sir Kenneth Newman has formally stated that racial attacks will be one of his prime priority targets for 1985. He has said:

Reducing the numbers will not be easily achieved, nor will it be won by the efforts of the police alone.
That, by implication, advocates tighter law and the need for clearer duties on the police in these cases. My Bill will provide just that.
However, the Bill also imposes duties upon local authorities, as it is also, in part, a housing Bill. There is a tentative policy to deal with the perpetrators of racial harassment in a few local authorities—Newham and the GLC should be praised—but it is a piecemeal and unco-ordinated approach in the absence of effective legislative backing. There is a poor record of co-ordination between local authorities and the police in dealing with cases of racial harassment. That has resulted in a hotchpotch of responses, instead of clear guidelines embodied in statutory responsibilities.
Specifically, my Bill will put on the statute book for the first time the crime of racial harassment—a racially motivated crime by a member of one racial or ethnic group against a member of a different racial or ethnic group. Racial harassment denies one the right to peace and comfort in one's home and reduces the quality of life. It can mean that the person affected fears for his safety.
The Bill includes a schedule that delineates such acts. They include unprovoked assault—including actual bodily harm and grievous bodily harm—damage to property—including breaking windows, doors or fences—the writing of racial slogans or graffiti, arson or attempted arson or damage to a building used by a racial or ethnic group, including places of worship and cemeteries.
The Bill also lays down police procedures for the conduct of investigations, the maintenance of records and the publishing of findings. It lays duties on all landlords and local authorities to inform their tenants and ratepayers of the offence and its consequences. Connivance or neglect by an officer of a body corporate, which can be the police, a local authority or a company landlord, in dealing with a case of racial harassment is also an offence. An injunction can be sought to stop any further acts of harassment occurring, and stiff fines and/or imprisonment are introduced upon conviction.
In severe cases, the Bill provides grounds for the eviction of perpetrators. They include the possibility of a compulsory purchase order being instituted against a convicted racist owner-occupier, subject to the acceptance of the Secretary of State. A convicted racist tenant who is subject to eviction cannot subsequently be rehoused in accommodation of a superior standard.
Consideration of the provisions of the Bill answers the criticisms of those who casually suggest that no new laws are needed. I was disappointed by the response of the Prime Minister yesterday to my question. The right hon. Lady expressed personal sympathy about the Ilford murders, but she was not prepared to make any effort to bring in legislation to combat this increasing form of violence.
Despite the Government's law and order stance, they want to leave the law out of their response to crimes of a specific racial nature. On the other hand, legislation against racial harassment is supported by the Labour party because it protects and defends our democracy. We cannot assume that a peaceful democracy exits in all sections of our community while many ethnic minority citizens live in fear and in a state of siege in their own homes.
We do not want to encourage vigilantes, but neither should we turn a blind eye when there is evidence of individual or organised Fascism perpetrated against ethnic minorities. My hon. Friend the Member for Copeland (Dr. Cunningham), who is shadow Secretary of State for the Environment, has said:
Victims suffer twice; they are attacked and then have to move home.
My hon. Friend is a sponsor of my Bill, and he has pledged that the next Labour Government will strengthen the law and help the victims of racial harassment. I am proud to have pioneered the way for future legislation against racial harassment.

Question put and agreed to.

Bill ordered to be brought in by Mr. Harry Cohen, Dr. John Cunningham, Ms. Jo Richardson, Mrs. Margaret Beckett, Mr. Max Madden, Mr. Ernie Roberts, Mr. Tony Banks, Mr. Jeremy Corbyn, Ms. Clare Short, Mr. Derek Fatchett, Mr. Gerald Bermingham, and Mr. Greville Janner.

RACIAL HARASSMENT

Mr. Harry Cohen accordingly presented a Bill to create an offence of racial harassment; to place a duty on a landlord to seek eviction of a tenant who is convicted of such offence if it is committed against another tenant of that landlord; to provide for the right of appeal against eviction and against proposals for rehousing; to place a duty on landlords and local authorities to provide information on the rights and duties in relation to racial harassment; to make provision for investigation of complaints and for a code of practice; and to make provision for compensation of victims: And the same was read the First time; and ordered to be read a Second time upon Friday 25 October and to be printed. [Bill 195.]

Mr. Jeremy Corbyn: On a point of order, Mr. Deputy Speaker. When you asked for the names of those who supported the Bill introduced by my hon. Friend the Member for Leyton (Mr. Cohen), I distinctly heard the hon. Member for Crawley (Mr.

Soames) and some of his colleagues near him saying that they were opposed to the Bill. Perhaps they may wish to clarify this, so that their view is clearly on record.

Mr. Nicholas Soames: Further to that point of order, Mr. Deputy Speaker. I did not say "No", nor did I hear any of my hon. Friends say "No".

Mr. Martin Flannery: Further to that point of order, Mr. Deputy Speaker. The hon. Member for Crawley (Mr. Soames) did say "No''. Not only that, but he was rude and objectionable the whole time that my hon. Friend the Member for Leyton (Mr. Cohen) was speaking. What is more, he conducts himself permanently as a proper lout.

Mr. Deputy Speaker (Mr. Harold Walker): Order. We have gone far enough on this. I did not hear anyone challenge the declaration that I made on the vote on the Bill.

Mr. Corbyn: Further to that point of order, Mr. Deputy Speaker. The hon. Member for Crawley says that he did not say "No" when Labour Members clearly heard him do so. Is it not incumbent on the hon. Gentleman to come clean about whether he supports or opposes the Bill to outlaw racial harassment?

Mr. Deputy Speaker: Order. We are all honourable Members. The hon. Member for Crawley (Mr. Soames) has said that he did not make the remark that was attributed to him, and the House should accept that, in accordance with its usual practice.

Mr. Andrew MacKay: Further to that point of order, Mr. Deputy Speaker. As the hon. Member sitting next to my hon. Friend the Member for Crawley (Mr. Soames) for the whole time that the hon. Member for Leyton (Mr. Cohen) was speaking, I can assure the House that my hon. Friend did not shout "No." and did not dissent in any way.

Mr. Deputy Speaker: I have already told the House that I accept the word of the hon. Member for Crawley, and I am sure that the House does.

Orders of the Day — Administration of Justice Bill [Lords]

As amended (in the Standing Committee), considered.

New Clause 5

PREPARATION OF PAPERS FOR PROBATE ETC. BY UNQUALIFIED PERSONS

'For section 23 of the Solicitors Act 1974 there shall be substituted—

"(1) Subject to subsections (2) and (3), any unqualified person who, directly or indirectly, draws or prepares any paperson which to found or oppose—

(a) a grant of probate, or
(b) a grant of letters of administration,
shall, unless he proves that the act was not done for or in expectation of any fee, gain or reward, be guilty of an offence and liable on summary conviction to a fine not exceeding the first level on the standard scale.

(2) Subsection (1) does not apply to a banister or duly certified notary public.

(3) Subsection (1) also does not apply to any act done by a person at the direction and under the supervision of another person if—

(a) that other person was at the time his employer, a partner of his employer or a fellow employee; and
(b) the act could have been done by that other person for or in expectation of any fee, gain or reward without committing an offence under this section.".'.—[The Attorney-General.]

Brought up, and read the First time.

The Attorney-General (Sir Michael Havers): I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to take the following: New clause 7—Probate work by qualified persons—

'(1) Section 23 of the Solicitors Act 1974 (restriction on persons acting in probate matters when not qualified to act as a solicitor) shall be amended as follows.

(2) After subsection (2) there shall be inserted—
(3) Subsection (1) also does not apply to any act done by a person who holds such qualifications as may be specified by the Lord Chancellor in an order made by statutory instrument under this section;
(4) An order made by statutory instrument under this section may be varied or revoked by a subsequent order and any such instrument shall be subject to annulment in pursuance of a resolution of either House of Parliament.".'.

Government amendments Nos. 5, 6 and 27.

The Attorney-General: In Committee an amendment was moved by my hon. Friend the Member for Stafford (Mr. Cash) to clarify the position of unqualified staff who undertake probate work at the direction and under the supervision of a solicitor. I undertook to table a Government amendment on Report to deal with the matter.
The new clause puts beyond doubt the legality of unqualified staff preparing probate papers in those circumstances. As the concept of supervision is not apt for the taking of instruction, we have decided to abolish the statutory restriction in this respect so as to enable solicitors' employees to continue to take instruction in probate matters without the risk of committing an offence.
We have also taken the opportunity to modernise and improve the existing drafting of section 23 of the Solicitors Act 1974.
The other amendments provide for appropriate transitional arrangements, and consequential amendments to clause 8, which relates to incorporated practices.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 1

JUDICIAL REVIEW

'If leave for an application to the High Court for judicial review is refused, the court shall state its reasons.'.—[Sir B. Rhys Williams.]

Brought up, and read the First time.

Sir Brandon Rhys Williams: I beg to move, That the clause be read a Second time.
My right hon. Friends and I have discussed new clause 1, and they know that I am interested in the subject for personal reasons. They also know that a significant body of well-informed people who observe the procedures of our courts believe that a change in the practice of the courts such as I am suggesting is highly desirable and ought immediately to come into effect.
Private citizens have come increasingly to rely on the judicial review procedure to obtain justice. The application goes before a single judge, who assesses the merits of the case and decides whether the applicant is to be entitled to take his or her complaint to the High Court.
Although not universal, I understand that it is normal for the single judge to make a ruling without stating reasons in court or in writing. That is wrong and should be changed immediately. In the event of the applicant being refused leave to take a case further, he and his legal advisers will have to make a difficult decision. For a private citizen, there is possibly the risk of futile but substantial expense if he decides to take his case further. There might be long delays before the outcome of the case is known and, during that time, he might lose chances to choose another solution which is available to him at once, but which might not be available if, in due course, his case comes to court.
If the applicant is advised to take the issue up for judicial review and his case is rejected out of hand by a single judge, that is likely to shake his confidence in his legal advisers. He might wonder whether they have given him bad advice.
A sense of resentment can be aroused if somebody who thinks that he has a fair case which ought to be heard is refused a hearing and no explanation is given. That is a type of resentment which British citizens ought never to feel about the operation of our courts. There ought never to be a suspicion that their case has not been considered adequately or that some factor which they do not understand, and which they could have overcome, has stood in their way when seeking justice. Justice should never be frustrated arbitrarily.
I have not been through all the relevant cases to see how many times the single judge has refused an applicant who has afterwards been able to establish that he has a serious case to be heard, though I am sure that such evidence could be adduced. But my right hon. Friends should be willing to accept my proposed change of procedure irrespective of whether I can support my argument with such evidence.
If the judge is clear about his decision, he can express it without being exposed to a serious extra burden. I am not asking that he should make a substantial written explanation, but he must state his reasons. If the judge is not perfectly clear and does not wish to be embarrassed by having to explain himself, there could be genuine doubt about whether justice has been done. That could not be right.
I hope that my right hon. and learned Friend will assure me that, if he does not like a new clause of one and a half lines appearing in the Administration of Justice Bill, the same effect will be achieved by another and, if he wishes, more appropriate route. I do not know how the Lord Chancellor would influence the practice of the single judge in the High Court, but, if the House is not to divide on the new clause, we are entitled to look to my right hon. and learned Friend to give a specific undertaking that the change required by my new clause will be made by another means.

Mr. Alex Carlile: The hon. Member for Kensington (Sir B. Rhys Williams) has raised a serious and important issue. The use of applications for judicial review has greatly increased recently, especially since the changes in the procedure from the old prerogative writs to the use of what we now call the judicial review procedure under order 53 of the Rules of the Supreme Court. Judges at all levels have pushed back the borders of judicial review. They are increasingly prepared to consider cases where Government Departments, local authorities and other bodies exercising quasi-judicial functions have not operated a fair procedure and have not acted properly.
Most applications for judicial review are made by aggrieved private citizens—many of them of limited means—who feel that important principles that affect their interests, and perhaps those of many others, have been attacked by the action of Government Departments or other bodies. I suspect that since applications for judicial review have become fashionable as a means of seeking judicial remedy, there have been many frivolous and unmeritorious applications. For those reasons, among others, the procedures relating to judicial review have been altered and sophisticated to enable applications with merit to be heard rather more quickly than before—there are still considerable and unacceptable delays, however—and applications with no merit to be disposed of rapidly and relatively informally.
Judges have never been afraid, when called upon to do so, to give their reasons, if necessary stating that an application before the court, whatever the jurisdiction under consideration, lacks merit or is even frivolous, vexatious or an abuse of the court's process. A long-standing tradition, inherent in the court through the operation of the common law, is the power to declare openly that a matter before the court falls within the categories of frivolous, vexatious and an abuse of the court's process. There is no question, therefore, of judges being put in an unpalatable position through having to give reasons in the situation postulated by the hon. Member for Kensington.
Most important in this context is the fact that at the moment there is no Bill of Rights to deal with contemporary issues that affect daily life in this country. I believe that there ought to be a Bill of Rights. Unfortunately, neither the Government nor the Labour party has been prepared hitherto to accept the need to go

even to the extent of incorporating the European convention on human rights into our domestic law. Consequently, all that many citizens can do, in an effort to enforce what they believe, rightly or wrongly, to be their rights, is to make an application for a judicial review. The jurisdiction of the courts in England and Wales is both lacking and inadequate in that respect.
One small way to ensure that such manifest feelings of injustice as can occur, did not arise would be to ensure that if an application is thrown out by the court, the applicant at least knows why. I hope that the Attorney-General will say that he accepts the principle that in such cases reasons should be given. If he is not prepared to accept that principle, I can assure him that the considerable pressure for fundamental changes to public law will become stronger.

The Attorney-General: I am grateful to my hon. Friend the Member for Kensington (Sir B. Rhys Williams) for raising this matter. I have a great deal of sympathy for it. I believe that I can give an assurance both to my hon. Friend and to the hon. and learned Member for Montgomery (Mr. Carlile). The Government agree that reasons should always be given. If that does not happen in practice, we should be grateful if examples of difficulties could be sent either to the Lord Chancellor or to me. The Lord Chancellor will consult the judiciary and. if necessary, introduce appropriate rule changes under order 53, which has virtually created the new system of judicial review. The hon. and learned Member for Montgomery described it as rolling back the frontiers. I prefer to say that it is advancing the frontiers. Whichever word one prefers, order 53 has created considerable changes which can only be in the interests of the general public. Therefore, I welcome them.
The changes are entirely the result of the rules committee changing the rules. They have not been brought about by legislation. Therefore, the changes for which my hon. Friend the Member for Kensington and the hon. and learned Member for Montgomery have asked can be made by rules of court. Primary legislation is not the right way to go about it.
Having heard my explanation, I hope that my hon. Friend the Member for Kensington will withdraw his motion.

Mr. Robert Maclennan: Can the Attorney-General say what time scale he has in mind for the consultations and for the introduction of these changes?

The Attorney-General: I should like to be able to answer the hon. Member for Caithness and Sutherland (Mr. Maclennan), but this new clause has been examined only recently. I have been one stage removed from it. However, my consultations earlier this afternoon with the Lord Chancellor have allowed me to give this assurance.

Sir Brandon Rhys Williams: With the leave of the House, Mr. Deputy Speaker.
I should like to thank my right hon. and learned Friend the Attorney-General for what he has said. If the House were to divide on this new clause, the feelings of hon. Members would be quite clear. I hope that the rules committee will bear in mind the strength of feeling about this matter. Although this has been only a short debate, it


is nevertheless incumbent upon the Lord Chancellor, or the rules committee, to ensure that action is taken quickly and that what is contained in my new clause should be brought into effect by one means or another.
In view of the assurance that I have been given, I shall not seek to divide the House this afternoon. Therefore, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 2

RESTRICTIONS ON CONFLICTS OF INTEREST IN CONVEYANCING

`No person or body corporate shall engage in the conveyancing of any property if they have a financial interest (other than their fee for conveyancing) in that transaction or any related transaction, including, but without prejudice to the generality of the foregoing, the provision of loans for the purchase of that or of any related property or the earnings of fees or commissions from estate agency, mortgage or insurance broking; and any person in breach of the provisions of this Clause shall if he is a licensed conveyancer be guilty of an offence punishable by the Council in accordance with Schedule 4 of this Act and liable on summary conviction to a fine not exceeding the third level on the standard scale or, in the case of a solicitor, shall be regarded as in breach of the rules as to professional conduct under section 31 of the Solicitors Act 1974'.—[Mr. Butterfill.]

Brought up, and read the First time.

Mr. John Butterfill: I beg to move, That the clause be read a Second time.
I rise this afternoon to provoke, I hope, a discussion on the considerable conflicts of interest that could arise from the conveyancing provisions of the Bill. Many hon. Members who are in the Chamber today were members of the Standing Committee and they will be aware of the reservations that I expressed in Committee. I shall itemise some of the principal areas where I see conflicts arising, in the hope that I shall receive assurances from my right hon. and learned Friend the Attorney-General.
The Bill proposes to take away the solicitors' monopoly on conveyancing and to permit a new class of licensed conveyancers. Those who are now engaged in all aspects of property transactions and property exchange may seek either to become licensed conveyancers or to employ licensed conveyancers. It is that aspect that gives rise to considerable concern.
It is possible that many estate agents will be sufficiently qualified by the examination that they have taken to apply to be licensed conveyancers. Others may meet those criteria or may employ licensed conveyancers. I perceive great difficulties if estate agents were to be involved in both estate agency and conveyancing. Many property transactions form part of a chain. A long transaction may involve three, four or possibly five properties. An estate agent who is selling a property at the top of the chain for £150,000 and earning a commission of £3,000 or £4,000 might also be selling a property at the bottom of the chain for £30,000 and earning a commission of only £600 or £700.

Mr. Alex Carlile: Does the hon. Gentleman agree that the problem he is discussing has already arisen over the two solicitors' property centres which have now been opened? One solicitor with an interest in the property centre is acting for the vendor, another solicitor with an

interest in the property centre is acting for the purchaser, and both have an interest in the house being sold by the property centre. Already we can see the conflict of which we are afraid arising in something which has the support of the hon. Member for Great Grimsby (Mr. Mitchell).

Mr. Butterfill: I am grateful to the hon. and learned Member for Montgomery (Mr. Carlile), and I agree entirely with everything that he has said. Later in my speech, I propose to deal in detail with that aspect. An estate agent might have two commissions from property sales in a transaction. He might also be involved in conveyancing one or more of the properties in a chain of transactions. An estate agent who was due to earn many thousands of pounds from a chain of transactions, and who was also acting as a conveyancer, might be faced with a problem of title of one of the properties. There could be an irresistible temptation for him to fail to point out the problem or at least to gloss over it, in the hope that the chain would not collapse and cause him considerable financial loss. That risk should rule out the possibility of estate agents carrying out conveyancing.
If solicitors are involved in conveyancing and the sale of properties, the same conflicts of interest will arise. Solicitors are already involved in the sale of houses and the Master of the Rolls, Sir John Donaldson, says that there is nothing in the solicitors' practice rules to prevent them from carrying out what he calls "property sales work", which, apparently, has always been part of the work of a solicitor.
Sir John uses the phrase "property sales work" to differentiate the work done by solicitors from that done by estate agents. That is a spurious interpretation, and I am sure that all hon. Members agree that if a solicitor advertises that he will sell a house, in addition to doing the conveyancing, he is, by any logical definition, involved in estate agency and, therefore, should be subject to the Estate Agents Act 1979 and any other regulations applying to conveyancing.
It has been claimed that solicitors do not need to be subject to that Act because their practice rules and the Solicitors Act 1974 impose on them obligations which are much greater than those imposed by the Estate Agents Act. However, that is not so. Solicitors are not subject to the mandatory disclosure of interests of relatives, staff and relatives of staff that is imposed on estate agents under section 21 of the Estate Agents Act.
Solicitors are not subject to the jurisdiction of the Director General of Fair Trading, as are estate agents. Solicitors are not subject to the powers of entry and inspection under section 11 of the Estate Agents Act, and they do not have to give details of their remuneration and expenses before a transaction takes place, as is required under section 18 of the Act.
Perhaps most important, although estate agents are required to account to their clients for interest on deposit moneys held for those clients, solicitors are not so required and may keep for themselves any interest earned. That is an important difference.
Whatever comes out of the Bill, solicitors involved in estate agency or "property sales work" should be subject to the same rules as everybody else.
Mortgage and insurance brokers may apply to become licensed conveyancers or may employ licensed conveyancers. They have an acute interest in property transactions.
They arrange mortgages for substantial commissions and life assurance endowment policies for substantial and continuing commissions on annual premiums.
If those brokers are also involved in conveyancing, there will be a grave danger that the large commissions which they earn from their brokering work, which will be much larger than the fees earned from conveyancing, could impose an unacceptable conflict of interest on them. Like estate agents, they could be involved in chains and they could build up a bigger interest in completing the deal than in looking after the interests of their clients.
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Probably the greatest problem is posed by banks and building societies. If in-house conveyancers are permitted to act for both sides, all sorts of conflicts may arise for the banks and building societies. Many borrowers are required to place their building insurance with a company nominated by the bank or building society. Until recently, that insurance had to be placed with the one company nominated by the bank or building society.
When I moved my mortgage from a bank to a building society, I was required to change my insurer, although he was a reputable underwriter at Lloyd's, and I had to accept one of the society's choosing. As a result, my premium almost doubled, and a substantial commission went to the building society.
We have taken action in the House to require banks and building societies to give borrowers a choice of insurance companies. However, only three companies are nominated by banks and building societies, and those are chosen because they give the biggest commissions and not because they give borrowers the best bargain.
If we are to allow banks and building societies to do conveyancing, will an in-house conveyancer be likely to tell a borrower that he could get a better rate of interest or a better deal by going somewhere else? It would be difficult for such a conveyancer to take a noble view that was contrary to his employer's interests.

Sir Anthony Grant (Cambridgeshire, South-West): I declare an interest as an adviser to one of the major clearing banks. It may help my hon. Friend to know that the banks are not interested in going into the conveyancing business. They do not think that it is part of their business and they are not particularly interested.

Mr. Butterfill: I am grateful for that assurance, but I strongly suspect that although that may apply to the clearing banks—though I doubt it, because they have gone into estate agency in other areas—I wonder whether it will apply to some of the secondary and tertiary banks and the loan sharks who inhabit this world. I have grave doubts about that.

Mr. Nicholas Budgen: My hon. Friend will know that Lloyds bank owns the very large Black Horse estate agency. The bank might not wish to engage in conveyancing direct, but there is no reason why it should not do so through the estate agency.

Mr. Butterfill: My hon. Friend has anticipated something that I intended to say later, but I am grateful to him for reinforcing that point.
Many banks earn substantial commissions by requiring borrowers to take out with a company nominated by the bank expensive life assurance to cover loans. The commission earned from that sort of business is very large and is bound to create conflicts.
Even more important is the mortgage deed—the terms of the loan—and how a borrower can be protected from the one-sided approach and lack of independent advice that would arise if the bank or building society were the sole arbiter for both parties. How would an in-house conveyancer advise a borrower if that borrower were made redundant or lost his job in some other way, and could no longer meet the payments? Under what circumstances could a lender evict a borrower, and what would be the rights of the borrower's wife and children regarding their occupation of the property? A court may grant an eviction order, and the bank or building society may be given the power of sale. What then happens if the lender controls an estate agency, such as the Black Horse agency or some of the estate agency chains set up by major building societies? Will the lender be able to sell the house through his in-house estate agency, raise the money, and get yet another commission from the entire transaction? If so, on what terms?

Mr. Austin Mitchell: That depends on which estate agent conducts the sale. How does having the advice of an independent conveyancer at the start of the procedure safeguard against all those problems arising, such as a person losing his or her job?

Mr. Butterfill: I am sorry that the hon. Gentleman has missed the point. All those matters are contained in the mortgage deed—the terms of the loan—and are normally negotiated between the borrower and the lender through their solicitors or other advisers. I am sorry that the hon. Gentleman shakes his head. I have been in professional practice in this field for 25 years, and I have acted in innumerable disputes between lenders and borrowers of the type that I am now describing. I have also been involved in negotiating with all sorts of institutions on the terms of their mortgage deeds. I accept that many people do not take up these points, but they should. Perhaps some of them have not been properly advised in the past. The debate may bring to people's attention the fact that they should be properly advised, and if we do no more than that we shall have achieved something for the public good.
If a borrower finds himself in financial difficulties, will he be permitted to take in lodgers to supplement his income? If he goes abroad, will he be allowed to let his house while he is away? Many mortgage deeds do not allow that, but after negotiations the lender often concedes that under certain circumstances that can be permitted. However, the concession is granted only be negotiation, and if the borrower asks. If one is not independently advised, will one ask? In the event of a dispute between the borrower and lender which may go to court, what provisions will be made for arbitration, and who will bear its cost? All such conditions are set out in the mortgage deed and need to be negotiated between two independent advisers, not imposed by one particular adviser.
Those are only a few of the problems arising with banks and building societies. We may argue that those problems will not arise with our highly respectable building societies, such as the Halifax, the Woolwich, the Abbey National and others, but they will arise with other building societies. There have been considerable problems with the Grays building society, the management of which has not been all that it should be.

Mr. Austin Mitchell: Does the hon. Gentleman realise, on the basis of the Which? survey and our knowledge of the world, that two thirds of house buyers approach a building society first? The same survey showed that only 11 per cent. sought advice from a solicitor about their mortgage. The hon. Gentleman is telling us that solicitors are qualified to give independent financial advice, which they are not, and that people are receiving that advice now, which they are not.

Mr. Butterfill: I am grateful to the hon. Gentleman for mentioning the Which? survey, but it was conducted among Which? readers, who tend to be better informed and who think that they can decide on these matters for themselves. The problem is that the general public, especially the young and inexperienced house-buyer, cannot so decide, and do not. The hon. Gentleman should study the Marplan survey, which, contrary to the Which? survey, showed that second-time buyers, as opposed to first-time buyers, recognise the grave need to have independent advice. That is precisely the point. People with experience of the system realise where they needed to be independently advised. Therefore, Marplan produced the opposite result to Which?

Mr. Budgen: I wish to take up the point of the hon. Member for Great Grimsby (Mr. Mitchell). The fact that only 11 per cent. of people want financial advice and that conflicts of interest may occur in only 1 per cent. of cases, is like saying that only 1 per cent. of those convicted before the courts are wrongly convicted. Are we not trying to deal with a grave injustice which may occur at the margin?

Mr. Butterfill: I agree with my hon. Friend.

Mr. Greg Knight: Does my hon. Friend agree that the argument of the hon. Member for Great Grimsby (Mr. Mitchell) is bogus? The hon. Gentleman referred to the percentage of people who approach building societies first, but is not the crucial point the fact that they then see a solicitor before they are committed to taking out the loan with the building society?

Mr. Butterfill: I agree with my hon. Friend. Most people, before they think about entering into a transaction, go to a bank or a building society to see whether they can borrow the money. After establishing that and finding the property, they go to their solicitor.

Mr. Tony Favell: I wish to make the same point. Does my hon. Friend agree that, after going to a bank or a building society people have the benefit of independent advice from a solicitor before signing on the dotted line?

Mr. Butterfill: Again, I agree with my hon. Friend. We may argue that conflicts will not arise with the highly respectable banks which we know and love, such as Barclays, Lloyds and the National Westminster, or even with financiers of undoubted probity, such as Julian Hodge and Bernie Cornfeld. However, we are also dealing with the denizens of the nether regions of the financial market—the loan sharks and tertiary banks, which impose conditions which many hon. Members would not even believe. We are legislating for those areas, in addition to the household names, whose conduct is not entirely beyond reproach.
We are told that the Government will deal with all these problems by regulation; that the regulations, which are to

be published, but which, regrettably, we have not yet seen, will overcome all the difficulties which may or could arise. I am grateful to my right hon. and learned Friend for showing me a copy of a letter which the Lord Chancellor sent to the hon. Member for Great Grimsby (Mr. Mitchell), and one which the Prime Minister sent to the hon. Gentleman, confirming that the Government are resolute in their view that banks and building societies should not be allowed to act for both sides in the same transaction because of the problems that have arisen. I am reassured by my right hon. and learned Friend on that issue at least.
I am less reassured on the prospective regulations, which cannot and will not apply to solicitors who are involved in estate agency. I hope that my right hon. and learned Friend will be able to reassure me, that he will explain how he proposes to deal with the anomaly that may well arise if solicitors are permitted to continue to practice both conveyancing and estate agency, and that the Government will deal with all the problems that I have described. If they legislate for any extension of a conflict of interest which they may regard as being in the public interest—otherwise, it would be a restriction on trade—I hope that a warning will be issued similar to that which appears on cigarette packets. There should be a Government warning which states, "Entering into this transaction without taking independent advice could seriously damage your financial health".
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I see no difficulty in providing one-stop shopping, which is so dear to the heart of the hon. Member for Great Grimsby and others. It can be provided by grouping businesses together under one roof. Why not have in one building a solicitor, an estate agent, a mortgage broker and even a building society? Perhaps they could all agree to charge a composite fee which would be lower than the sum of the parts. There could be agreed divisions of the fee of individual responsibility for those with whom they deal. If there is no individual responsibility, there will be temptations and conflicts of the sort that I have described.
For example, if a building society conveyancer, in acting for both sides, were to behave inappropriately or negligently, that would give rise to an action for negligence on the part of his client. If he were an independent solicitor, how could the borrower sue? How could he sue the building society's own solicitor, when that solicitor or conveyancer could say, "I was acting for my principal client, my employer. I have no duty to you."? Where would the remedy be for the borrower in those circumstances?
I hope that the Government will deal with all these matters when they come to address the regulations. I hope also that my right hon. and learned Friend will give an assurance that the regulations, when they are available, will be brought before the House for an affirmative resolution. The House must have the right to scrutinise. The matter cannot be left to the Lord Chancellor's discretion.
If we do not get the protection for which I and many others are looking—we shall not know until we are able to study the regulations—I hope that the professions that are involved in property transactions will take the initiative themselves. I trust that the professions will come forward with a self-denying ordinance whereby they will say to their members—I include the Law Society, the new


Council for Licensed Conveyancers, which we are about to establish, the Royal Institution of Chartered Surveyors, the National Association of Estate Agents and all the other bodies involved—"None of you should be involved in conveyancing if you have any other fee or commission arising out of the property transaction." Perhaps we can persuade the professions to produce a self-denying ordinance, instead of pursuing their own self-enrichment, and to act in the public interest for the protection of the public.

Mr. Ken Weetch: The new clause should be opposed and defeated. The presence of a profusion of lawyers in the Chamber makes me certain that we are hearing the last gasp of the old restrictive practices system. The lawyers are making a last-ditch attempt on behalf of their entrenched professions to retain the old system by opposing radical and structural change.

Mr. Butterfill: rose—

Mr. Weetch: No. I shall not give way at this stage.

Mr. Butterfill: I wish to intervene on the very point that the hon. Gentleman is making.

Mr. Weetch: I shall not give way at this stage.
The professions are attempting to oppose changes in conveyancing. They wish to keep conveyancing in the dark ages, where it has been for 150 years, to the disadvantage of the consumer.
When we talk about an issue in the House we are frequently, in reality, talking about something else. In this instance we are not really talking about conflicts of interest or anything similar. It is convenient for lawyers to advance the conflict of interest argument and to avoid other issues. It is a bogus argument and that can be said for much of the other stuff that we hear from the legal profession.
The reality is that we are discussing economic matters. Who is to gain the major slice of the lucrative conveyancing market that arises from a society that is becoming more than ever a property-owning democracy? The Building Societies Association calculates that by the end of the century over 70 per cent. of the population will be owner-occupiers. These people will be more mobile and, therefore, the conveyancing market will be worth thousands of millions of pounds. It is not surprising that the legal profession is defending restrictive practices to the last ditch. It clearly considers it crucial that it should have the largest slice of the action. The argument over the new clause sets the scene.
It is important to bear in mind the main objective of the conveyancing exercise. Our aim is to give the consumer as many options as possible. If someone wishes to buy a house, to buy and sell, to trade up or to buy for the first time, I want him to have the maximum number of options. If a firm of estate agents has an in-house department of licensed conveyancers, I do not see why the consumer should be prevented from using the agency. I should like him to have the option of a licensed conveyancer working for someone else or on his own account. The consumer should have access to a solicitor if that is what he wants. He should have access to the conveyancing department of a major bank if that is his wish. In other words, he should have all the options before him.
The choice should extend beyond outlet to structure. The consumer should have the choice of a small firm, a medium-sized firm with corporate status or a large-scale

approach. He should be able to choose between a number of individual specialists working on their own and an in-house conveyancing service. The pattern of consumer demand to emerge will be for the market place to decide. Perhaps the right hon. Member for South Down (Mr. Powell) will take that comment in the spirit in which it was intended. The structure should emerge according to the shape of supply and demand in the market place. I hope that that point goes home to the right hon. Gentleman.
Although I initially had some reservations about conveyancing with respect to building societies—I have criticised the building societies in the House—I now believe, on balance, that the proposition should be supported. The Bill is a poor attempt to bring about more competition. In principle, it has widened the category of persons who can practise conveyancing but has loaded it down with such a lot of paraphernalia that the widening will not be great. In return, the monopoly has been tightened but extended to the contract for sale—previously untouched by the monopoly under section 22 of the Solicitors Act 1974. In a fundamental sense the "monopoly" is more vicious and tightly functional than it has been for 150 years. If this is an exercise in more competition, it is a straightforward confidence trick. If building societies and banks are allowed to carry out conveyancing which is regulated properly by appropriate codes of practice, the scope of consumer choice will be widened.
The burden of one argument is that there is a great potential for abuse if building societies and banks perform the conveyancing on a property. That possibility exists, but it does not logically follow that abuse is inevitable. It is possible to legislate against abuse. If it is argued that we cannot choose an option because of potential abuse, we shall never move forward. The right action is to take the advantages from a line of options, legislate against the abuses and ensure that they do not occur.

Mr. Butterfill: Would the hon. Gentleman care to comment on a recent case involving a Lincolnshire solicitor whose wife runs an estate agency from adjoining premises? The Law Society has ruled that there is no conflict because the two businesses are in no way related.

Mr. Weetch: I shall not comment on that case. An intervention in which an hon. Member puts a case to another hon. Member without giving supporting detail is not even a good beginning for consideration. If the hon. Member for Bournemouth, West (Mr. Butterfill) will send me all the supporting correspondence, I shall consider the matter. At this stage I cannot give a snap judgment on my feet about what is probably a complicated matter. I think that that is the consensus of the House. If that is the type of legal advice that comes forward in a snap judgment, I hope that it is the advice that would be used when I am being prosecuted and not when I am being defended.
Building societies can offer substantial structural advantages in conveyancing. As large organisations, they can offer certain industrial-type advantages. Make no mistake—conveyancing is organised in the same way as the putting-out system was organised in the 18th century, and it has not altered since. It is still a matter of small workshops, which the managerial and technical revolutions have passed by. Conveyancing has been impeded by the monopoly that has been enshrined in legislation.
As large organisations, building societies can offer certain advantages. A large in-house department in, say, the Halifax building society can offer a large throughput of conveyancing transactions which can be backed by substantial financial resources and streamlined procedures. That is a natural extension of the building societies' activities, and they have a critical interest in the title. We are talking about a large throughput of work at low unit cost.

Mr. Carlile: Does the hon. Gentleman believe that, in his Shangri-la of building societies with large conveyancing departments, the scrutiny of a conveyancing transaction for a client living in Llanidloes by the Halifax building society some 200 miles away in Yorkshire would be as good as the scrutiny given by a Llanidloes solicitor who has no interest in the transaction other than the fee that he will obtain for the conveyancing?

Mr. Weetch: It may, or it may not be as good. These days when conveyancing transactions take place the last thing that a solicitor does is look at a property. I would go one stage further and say that I have seen bigger mistakes in my constituency by local solicitors than by solicitors who operate from London. Whether one lives in a particular locality or has a professional business in that locality frequently has nothing to do with it.

Mr. Frank Field: One of my hon. Friend's assumptions concerns falling unit costs. Is it not true that building societies might push up unit costs? They might say, "The loan is here for you if you use our lawyer, although our lawyer happens to be more expensive than one outside the building society."

Mr. Weetch: I was going to bring up that point later in my speech when dealing with the shortcomings that we should guard against in allowing building societies to engage in conveyancing. I believe that the unit costs of the building societies will be lower because they will operate under economies of larger scale. If they do not, as long as the consumer has the option to go elsewhere for his conveyancing, he can decide what to accept and what to avoid. There should be a code of practice in which abuses and potential abuses are outlawed.
The real point is not about conflicts of interest. The Law Society has only relatively recently stipulated that a solicitor cannot act for the buyer and seller at the same time. Until a few years ago it was the usual practice for a solicitor to act for the buyer, the seller and the building society. There are a good many cases in which that still happens. I have a constituency case where the solicitor is acting for the seller, the buyer and the building society. I wrote to the Law Society asking this simple question: is this professionally right? Unfortunately, the answer went to my constituency office in Ipswich. I said to my secretary, "Read the letter for me and simply tell me 'yes' or `no' whether it is right for a solicitor to act for the buyer and the seller." She said, "The answer appears to be a little evasive." I thought to myself, "I bet it is." This is not the first time I have come across this sort of thing. For all the arguments about conflicts of interest and who should do what in conveyancing, most solicitors do not care if Joe Soap does the conveyancing, provided they collect the profit from him.
We are not talking about ethics; we are talking about economics. Many people believe that large building societies will drive out small firms, that small solicitors' offices will be unable to compete with large building societies with in-house departments. They have genuine fears that some building societies might use conveyancing as a loss leader. Small firms would therefore tend to go out of business.
If we applied that principle elsewhere and prevented large firms emerging we should still be in the world of the small workshop and the small grocery shop. If the conveyancing market demands that large firms emerge, they will emerge. If that is the structure that the consumer and the market place want, that is what will happen. Passing this new clause will not stop it because it will be an organic function.
Over the years, building societies have indulged in a multiplicity of restrictive practices. They have restricted insurance cover opportunity and taken the commission. Until relatively recently, they never allowed the purchaser to have sight of the valuation survey. Building societies have been the centrepiece of the conveyancing monopoly. They have also organised a cartel on interest rates. No one was ever protected from those abuses by solicitors or any of the chartered surveyors because the major professions connived with the building societies in some of those abuses.
Solicitors have always been able to place money in building societies, sometimes with and sometimes without the consent of their clients, in return for mortgage queue jumping, and at times of scarcity of funds, in return for building societies underpinning their monopoly and for favourable conditions for doing the mortgage work. Solicitors have often connived with the building societies in providing life policies which did not suit the consumer.
If the legal profession criticises building societies for collecting commission, it is the pot calling the kettle black, because I know of no group of people which collects commission faster from a variety of directions than do practising solicitors. Much of that argument is therefore bogus.
We are approaching the problem in the wrong way. Building societies can do the job, provided the potential for abuse is eliminated. We should eliminate the abuse by statutory codes of practice, not eliminate the option.
A number of things must be done. The consumer must be given the freedom to go elsewhere. Any practice which involves pressure to take conveyancing services because a loan is being provided should be outlawed. Any contract which loads the conveyancing charge on to the mortgage, at many times the original price, should be forbidden. Loss leading should be outlawed when it is aimed at eliminating competitors.
The Office of Fair Trading supports the idea of building societies doing conveyancing. I am confident that it can protect the consumer in all these matters. With the proper safeguards, the consumer should be given the option of having his conveyancing done by a building society, and I believe that it is not for the House to stop him.

Mr. Alex Carlile: We have heard from the hon. Member for Ipswich (Mr. Weetch) a speech of almost religious fervour, in which he indulged in all the cheap rhetoric of lawyer bashing. I confess with some pride to being a lawyer, but I should tell the House, before the hon. Gentleman berates me for my self-interest, that I have


rarely seen a conveyance, apart from those which from time to time I have signed to accommodate myself and my family, I have never passed an examination in conveyancing, or tried to, I have never read a book on conveyancing, and I have little interest in conveyancing as a legal subject.
I fear that one word used repeatedly by the hon. Gentleman has revealed the weakness of his argument—the word "consumer". The hon. Gentleman, and some of those who are of like mind on this issue, seem to envisage a world in which an attractive young couple will be out doing their shopping on a Saturday morning and will suddenly turn to each other and say, "Let's go and buy a house." They pop into the estate agent's and pick out a house. Then, rather as if buying a can of beans, they pop into the building society and everything is arranged for them by the smiling manager, and all goes through smoothly and without a hitch. That is seen as the world of the consumer.
Unfortunately, we do not consume our houses as we consume a can of beans. We must live in our houses. We must live, not just with their attractions, but with their imperfections. The greatest imperfection that there can ever be in a house is a defect in the owner's title. I speak in favour of the new clause because I believe that everything possible must be done to ensure that the householder's title is protected and assured to the greatest possible extent. There is no protection for purchasers of houses comparable to that provided under the Sale of Goods Act 1979. It is not possible for a householder, who has purchased his house in circumstances which go wrong, to go to the local trading standards department and have the building society—if it be a building society—prosecuted for defective conveyancing under the Trade Descriptions Acts.
The purchase of a house is usually the most serious, expensive, enduring and, in some cases, dramatic commitment that many people make, apart perhaps from the commitment to marriage. We should consider house purchase within that context of its importance in people's lives. It is expensive to buy a house, whether one buys it in the ritzy arbours of the south-east or on the pleasant mountains of Wales. A great deal of money must be found by the person who wishes to buy a house. It is a fact—it may be uncomfortable for those who oppose the new clause—that building society A may offer interest rates slightly lower than those offered by building society B, and the interest rates of building society C may be slightly higher than both. It is not simply a matter of a quarter or a half per cent., because it is likely that the person buying the house will be committing himself or herself for about 25 years, and a quarter per cent. means a great deal of money over those 25 years. The commitment may involve not just the mortgage repayments, but the payment of insurance premiums.
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The hon. Member for Ipswich suggested that, in his perfect world of fair and regulated building society conveyancing, there would be some kind of free choice as to which building society one would go to. More important, he said that there would be a free choice, if one went to a building society, of deciding not to use that society for one's conveyancing. He said that one could still go to the solicitor down the road for the conveyancing.
It is a custom of the hon. Member for Ipswich to listen to only one side of the argument on these issues, and he is not listening now. If he can bring himself to have the courtesy to listen, I say to him that we are in a mortgage glut at present, and it may be that people can walk out of a building society saying, "I am going to the solicitor down the road for my conveyancing," but if there were a mortgage famine, as there has often been in the past, is the hon. Gentleman really saying that one could enforce a provision whereby the building society would have to say to the prospective purchaser, "We are awfully sorry to lose your conveyancing, but of course we will give you the mortgage in any event."? One would have no such luck. A building society would not provide the mortgage for people who did not have the society doing the conveyancing.
If the hon. Member for Ipswich honestly thinks chat building societies will not use conveyancers to ensure that they get the mortgage business on the terms that they want, it shows that he has not examined the issues properly and does not understand the meaning of the phrase "conflict of interest".

Mr. Favell: Is that not what happens now in many states of the United States of America? If one goes to a loan company and does not use its legal services, one simply does not get the loan. The use of the legal services of the loan company is very expensive, and people in many parts of America are trying to get out of the clutches of a loan company for that reason.

Mr. Carlile: I am grateful to the hon. Member for Stockport (Mr. Favell) for drawing attention to the American experience. His point reinforces my argument.

Mr. Butterfill: Does the hon. and learned Gentleman agree that his fears are reinforced by the behaviour of building societies with regard to insurance for the property?

Mr. Carlile: I entirely agree with the hon. Gentleman, who has referred to his own experience. I have had similar personal experience on two occasions. On one occasion I had to insist upon using the insurance company in which I had confidence and from which I expected to get satisfaction.
There are, of course, mutual life offices, which do not pay commission to anybody. Many of us have taken out our own insurance policies of all types with those mutual life offices. One can hardly imagine the building societies giving anything but discouragement to purchasers of homes who wish to go to those mutual life offices, which do such a good job—and have for hundreds of years—in the insurance market.
The hon. Member for Ipswich says—and I heard the hon. Member for Great Grimsby (Mr. Mitchell) muttering something to the same effect from a sedentary position—that solicitors are qualified to give financial advice. One of the basic qualifications which a solicitor must have is some financial understanding. I would be the first to question whether the present training of solicitors and barristers is either adequate or covers the fields that it should. Nevertheless, solicitors, in order to practise in conveyancing, are trained and must have a basic understanding of the transactions. In addition, they learn a great deal through their experience.
I am sure that the hon. Member for Ipswich will be aware that, under the solicitors accounts rules, a person


cannot come straight out of law school and set up in practice as a solicitor. There has first to be supervision by a senior qualified solicitor for a period of years.

Mr. Greg Knight: Does the hon. and learned Gentleman agree that often the solicitor will get the client to question the transaction? The solicitor will say to the client, "Are you sure you want to go ahead with this? Are you sure you want to take out a loan of this size?"

Mr. Carlile: The hon. Gentleman is correct, and I shall be coming to that point, but before doing so may I postulate a rhetorical question? How often do we hear of building society managers saying, "Yes, Mr. and Mrs. Jones. Thank you for your interest, but the house is pre-1919, so you will be better off down the road at another building society which gives greater percentage loans or loans at a lower rate for such properties."? How many times can we expect to hear building society managers saying—[Interruption.] Does the hon. Member for Great Grimsby wish to intervene?

Mr. Austin Mitchell: I hope the hon. and learned member realises that, in regard to the duties of solicitors, Cordery's book, "The Law relating to Solicitors", specifies:
A solicitor is under no duty to advise his client whether a sale is a prudent one or whether an independent valuation is
desirable".
In other words, the financial side of the transaction is not the solicitor's responsibility.

Mr. Carlile: The hon. Gentleman's corduroy is as threadbare as his argument. The fact is that a solicitor who does not give that kind of advice to his client has very little prospect of continuing in practice as a solicitor. If the hon. Gentleman will open his eyes and look at the advice given by solicitors, he will find that day by day they are saying to their clients, "The terms of building society A are better than those of building society B, so although you have been to building society B to make inquiries, I suggest that you take your mortgage from building society A. How many building societies will say to Mr. and Mrs. Jones, coming in off the street, "Our terms are worse than those available down the road."?
I received a letter yesterday from a solicitor in Hull—not a million miles from the seat of the hon. Member for Great Grimsby—making precisely the point that was made in an intervention. That solicitor told me of a specific recent case in which a client of his had come into the office, having made the decision to purchase a particular property, and given him instructions to deal with the conveyance. By the end of the week the client had decided not to buy that property because the solicitor had pointed out to him that, from the resale point of view, it was not in a particularly good area, that he probably could not afford it in any event, and that he would be just as well off in his existing house with an extension, which would cost him far less money, and for which finance by way of mortgage was available. That is the sort of service that is given every day by solicitors, whose only interest in the transaction is the fee that they will have, either for the conveyancing or for the advice they give not to go ahead with the transaction.
We heard from the hon. Member for Bournemouth, West (Mr. Butterfill) about the need for scrutiny of the

mortgage deeds. I will not repeat it; I will simply say how right he was. The House is grateful to him for making that point so forcefully.
I have heard it suggested that the local solicitor would provide no better service than the solicitor in the great in-house office in Halifax. It was suggested by the hon. Member for Great Grimsby from a sedentary position that the country solicitor who does the conveyancing for the client never goes to look at the property. Perhaps I am lucky in the solicitors that I know. My own solicitor has never conveyed a house on my behalf, on the many occasions when we have moved, without walking round every inch of the boundaries of the property. At least the solicitor is there in the area, so the client can ask him to walk round and check the boundaries. In country areas the first thing that any solicitor looks at is the boundaries, either on a plan or by walking round them. If any difficulty arises as a result of the inquiries before contract, will the in-house conveyancer get into his company Rover and drive from Halifax to Llanidloes? If he does, who will pay the 30 or 40p a mile for him to do it? It will be the client. All this brings into question not just the arguments against our conflict of interest point as put forward by the building societies, but the cost-effectiveness argument that we have just heard.
I do not expect certain Labour Members behind me to agree, but the solicitor acting independently is not in anybody's pocket except the pocket of his client. If he renders an unsatisfactory service, his client has a number of forms of redress. He can go to the Law Society, though I would rather see him going to an independent complaints body. That is a matter which we may discuss later. He can also sue his solicitor. During the Committee stage of the Bill the hon. Member for Great Grimsby asked whether it was sensibly possible for a client to sue his solicitor.

Mr. Austin Mitchell: How common is it?

Mr. Carlile: The hon. Gentleman has just asked from a sedentary position: how common is it for a solicitor to accept instructions to sue another solicitor? There are hundreds, if not thousands, of cases every year in which solicitors are sued by their clients. I hear laughter on the Opposition Front Bench, but those of us who practise the law have acted on innumerable occasions in actions against solicitors for breach of contract and negligence. I ask the hon. Member for Great Grimsby to produce to the House a catalogue of cases in which the negligent actions of solicitors have not been taken up but should have succeeded. I should be surprised if he is able to do so.

Mr. Butterfill: I should like to reinforce the hon. and learned Gentleman's view on that point. I am a chartered surveyor, and my firm frequently acts for the insurers appointed by the Law Society on actions between solicitors, where one solicitor is suing another. It is a substantial proportion of the work of the firm in which I am a partner. It certainly happens very often.

Mr. Carlile: I am grateful to the hon. Gentleman for his comments. If one sues a building society, as many people have had to do, one runs up against all the institutional stonewalling to which one is all too accustomed in litigation. The underwriters who deal with solicitors' negligence claims are frequently under pressure to settle, and they frequently do. Although some solicitors' negligence actions are unfortunately and needlessly


protracted, a great number of the claims are settled. Actions for solicitors' negligence generally avoid the institutional harshness of a suit against a building society.
I turn now to the matter of solicitors' property centres. I received a letter this morning from a senior and respected solicitor who practices in the Wrexham area. He is personally known to me and I have considerable regard for his ability and his objectivity. The solicitors' property centre in Wrexham has run into professional difficulties. As I mentioned in an intervention, there are instances where one firm which makes money from the centre is acting for the vendor, and another firm which also makes money from the centre is acting for the purchaser. That raises a clear conflict of interest. I am afraid the Law Society has taken a weak line on it and says that it does not know the answer. That does not help my correspondent very much. That conflict of interest ought to be instructive to those who wish to extend conveyancing to the institutions.
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The county of Powys includes, I am delighted to say, the constituency of Brecon and Radnor. I wanted somehow to get that into the debate. In a rural area like Powys, which is but an example, there are many excellent and old-established firms of solicitors. Those firms provide an all-round service. They deal with many problems similar to those with which we deal at our constituency surgeries. They deal with matrimonial matters, crime, probate and conveyancing. Some of the things with which they deal are not within their immediate expertise, but they are able to obtain specialist advice elsewhere. To a great extent, their bread and butter is conveyancing. By and large, they are not expensive conveyancers, because they cannot be. The price of a freehold cottage in Powys may be between £15,000 and £20,000, and one cannot charge a lot of money for the conveyance of a £15,000 cottage. While conveyancing no longer subsidises other work, for litigation is nowadays apparently worth while for solicitors, without the conveyancing the prospects for many of those firms would be poor.
I hope that the hon. Members for Ipswich and for Great Grimsby, whose party last night, in the debates on the rate support grant, was espousing the need for local services, do not wish to nationalise the legal advice service. I hope they share my view that it is desirable for a reasonable standard of legal advice to be available in all areas, including the small market towns of Montgomeryshire. I hope the hon. Gentlemen will accept that there is a risk that firms of solicitors in areas like that will be forced either to amalgamate or to cut the range of services.
There is great competition, even hostile rivalry, between firms in small towns, which makes it as sure as anything that negligence by a firm of solicitors will be rooted out. I hope that the hon. Gentlemen agree that the level of competition and service should be maintained. I hope that they will take it from me that the profession knows best how much it depends upon conveyancing for its bread and butter.
Amalgamations may take place. Many of them would be against the public interest, but there is an even greater danger. It is that these highly respected, independent, and in many cases exceedingly skilful firms of country solicitors, may be forced into takeovers by slick city firms. It would not be in the interests of people in the shire

counties and rural areas to have only the limited legal advice services provided by small branch offices of big city firms. Hon. Members who are tempted by institutional conveyancing should bear in mind the legal service needs of the community before they pitch in with the lobby we have heard ventilating its views this afternoon.

Mr. Knight: In view of the propensity of the hon. Member for Great Grimsby (Mr. Austin Mitchell) to keep commenting on the number of lawyers who have taken part in this debate, perhaps I should start by saying I have no interest to declare. Although. I am a qualified lawyer, I currently receive no fees or remuneration from that profession. However, I have a deep unease about the prospect of building societies being allowed to carry out domestic conveyancing.
I should draw the attention of the House to two articles that appeared in last Sunday's newspapers. The first article, from the Sunday Telegraph, was headed, "Conveyancing—the great debate." It stated something that we all accept and know:
Building societies argue that they would—if legally permitted to employ their own solicitors—give customers a cheaper, quicker service … Some insurance brokers voice the suspicion that building societies are invading their patch a little too greedily and are becoming intensely preoccupied with earning commission on endowment mortgages, house insurance and house contents insurance.
Further down the same page, the paragraph headed, "The Savings Scene", referred to the proposal by the Leicester building society to merge with the Alliance. It also stated:
If the proposed merger of the Woolwich and Nationwide Building Societies goes ahead our three biggest societies—the Halifax, Abbey National and Woolwich-Nationwide—will outweigh all the others put together.
There is something sinister about that. The building societies are developing their muscle in the expectation that they will be allowed soon to carry out conveyancing.
The Sunday Times carried an article entitled, "Farewell 1874, roll on 1987: It's all go for new business." The article stated:
While there is little contention over services such as money transmission and insurance sales … certain other proposals raise fundamental questions about conflict of interest and about the building societies' ability to move from doing a simple job, which they are generally considered to do well, to providing some more complex financial services. On the question of ability, the portents from across the Atlantic are not good. A few years ago, the American equivalent of building societies, the savings and loan associations, were given the freedom to broaden their services. In the best-run associations, big staff changes were needed to operate the broader range of services. And at the worst run there have been multi-million dollar disasters as a result of irresponsible lending and over-ambitious investment. The building societies claim that it will not happen here.
They would, wouldn't they? The House should note that danger.

Mr. Butterfill: Does my hon. Friend agree that another danger is that building societies are not democratically accountable? In theory, their members—the depositors and borrowers—may attend their general meetings, but, in practice, hardly anyone turns up. Therefore, they are self-perpetuating oligarchies, effectively accountable to no one. In contrast, large institutional shareholders of public companies can attend their annual general meetings and influence board policies. No such thing happens with building societies.

Mr. Knight: My hon. Friend makes a valid and telling point, and the House will have noted his comments.
The hon. Member for Ipswich (Mr. Weetch) appeared to say that we are right to have fears, but that those fears can be regulated by legislation. He said that those who have spoken against allowing building societies to carry out conveyancing are overstating the case. However, building societies are already regulated, and I do not believe that they serve their customers as best they could. One need only walk down the high street of any town to see the offers that building societies can make, within the scope of the regulations to which they must adhere, to try to attract custom. I have noted a few of the inducements that are currently on offer. One building society offers money boxes to children who open accounts; another offers trips to a zoo; and another suggests an "adopt a duck" account, which allows its new customers to do that, and gives them free admission to a wildfowl trust centre. However, none of those accounts offers high rates of interest. In addition, the children who are induced to open such accounts cannot claim back the tax that they will pay through their savings. Under the present restrictions on building societies, the customer is not getting the best possible service. Therefore, one should be worried about what might happen if banks and building societies are allowed to carry out conveyancing.
No Conservative Member would disagree with increased competition in conveyancing. Indeed, that is what the Bill seeks to do in a modest way. But the House must ensure that it does not allow building societies so much power in the marketplace that anti-competitive practices result. We are on thin ice, and we must tread warily.

Mr. Austin Mitchell: It is fascinating to see so many professionals gathered here today to defend their vested interests and earnings from the consumer. It was especially interesting to hear the hon. and learned Member for Montgomery (Mr. Carlile) appealing for the country solicitor vote in his constituency. I do not know whether he was unveiling Liberal party policy on competition, but, if he was, we welcome it. The real spectacle today has been Labour Members urging competition and Conservative Members, as usual, defending vested interests.
We must be clear about the effect of the new clause. It is designed to stop competition and the development of comprehensive services to the consumer. It does so on behalf of the vested interests—especially solicitors and some other professions—which have been doing too well for too long at the expense of the consumer. That is the essence of the argument.
There have been different approaches to the fear of competition. The Law Society, which failed to retain the conveyancing monopoly, has suddenly decided that it had better start to steal the building societies' clothes. Therefore, it has dressed itself up as the protector of the house buyer and started to attack the building societies as though they are ogres and have not been serving the house buyer for about 100 years by providing mortgages.
The Lord Chancellor, acting here as the political arm of the Law Society—[HON. MEMBERS: "Oh!"] In that case, the provisional wing of the Law Society—has produced a mythical conflict of interest which he says is sufficiently important to obviate the principle of more competition. He has not published details of the conflict

of interest, or given us any idea about the nature of the replies that he has received to his inquiries. He has not told us the number of cases to which that conflict of interest applies. We have no published evidence to support the Lord Chancellor's assertion that the conflict of interest is so overwhelming as to prevent banks and building societies from carrying out conveyancing.

Mr. Butterfill: I should take up the hon. Gentleman's point about the new clause being a defence of vested interests. Of the hon. Members whose names are attached to the new clause, only two are solicitors. My profession is completely unregulated. Anyone—even the dustman—could set up tomorrow as an estate agent. Indeed, the dustman could set himself up tomorrow as a surveyor, which I would regret. Perhaps the House will discuss that matter later. I cannot understand what vested interest the hon. Gentleman believes I am protecting.

Mr. Mitchell: The effect is to defend the vested interest of solicitors in maintaining an effective conveyancing monopoly. That is how it works out. The way in which the hon. Member of Bournemouth, West (Mr. Butterfill) has approached it is to explode the doomsday weapon. His approach drives everything apart. We want services to come together to help the consumer. I want to pose a few questions about how this will work.
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If a solicitor serves on the building societies panel and does the conveyancing for somebody, he gets a separate fee for acting on that panel. That would be stopped by the new clause. He would not be able to advise the building society on title, so that practice would go. If he has an agency for a building society, that also would be stopped. If solicitors combine, as they do in Scotland and in some parts of this country to run a property centre—it is an increasing practice which I commend and which we should encourage—that, too, would be stopped by the new clause. If a solicitor is taking a commission from a building society in respect of money invested in that building society, that would stop his advising people to take out a mortgage with that building society.

Mr. Butterfill: I am delighted that the hon. Gentleman confirms the effect which I envisage. The intention of the clause is to stop people having their snouts in the same trough more than once.

Mr. Mitchell: I agree that there is a noble spirit of self-sacrifice, but I think that the professions which are backing it do not realise exactly what is implied. They back it from a very different motive—to keep their snouts in a particularly rich trough.

Mr. Favell: I am a practising solicitor and an agent of the Halifax Building Society. The hon. Gentleman is absolutely right. Solicitors will suffer from the new clause if it is agreed to, and they should, because I have always believed that a dog cannot have two masters. That is why solicitors do not act for vendor and purchaser. I should like to ask one question of the hon. Gentleman. On this of all days. Would he be happy if Johnson Matthey acted for the customer and for itself in the matter of a loan, because it is a bank?

Mr. Mitchell: I should be happy if the Treasury and the Bank of England acted on Johnson Matthey in a sensible fashion. I shall ignore that question, because it is irrelevant.
There is a spirit of self-sacrifice if a solicitor is rushing forward to give up a privilege in this fashion—it is done to stop the banks and building societies acting in competition.
This forces us back into an old situation, but we are now discussing a new class of house buyer in today's society—people who have not bought houses in the past and who do not have the middle class skills and tradition of contact with a solicitor. The house buyer is forced to build up his own orchestra piece by piece instead of having a comprehensive service—one-stop shopping—whether it is provided by estate agents, banks, building societies or solicitors running property centres. All can compete to provide a comprehensive service. That is what we want for the house buyer, rather than the professional segregation which this measure would enforce.
What should we do about the new clause? My view is that we should leave the Bill as it is. I have therefore tabled no amendments of the kind that we dealt with at such length in Committee to allow banks and building societies to do conveyancing, whether through licensed conveyancers or solicitors. The amendments tabled in Committee were intended to air the principle. The principle is reasonably straightforward and secure. Therefore, it would be better to leave the Bill open rather than include this unnecessary restriction. In essence, we are committed to allowing banks and building societies to do conveyancing.
I and the sponsors of the Bill which I brought in in 1983 have firm promises from the Solicitor-General that the Government are committed to allowing banks and building societies to do conveyancing through employed solicitors. The building societies have firm promises from the Government that they will be able to provide an integrated service to the house buyer, part of which must be conveyancing.
The Chancellor is pirouetting and wriggling, trying to find ways to fulfil the principle without conceding the practice, and he has come up with two proposals. The first is that the building societies should be allowed to do conveyancing for other people's customers. In other words, people will get killed crossing the road from the Bradford to the Halifax. Perhaps we shall have a twinning arrangement or something similarly ludicrous.
Secondly, there is the letter of 8 July from the Lord Chancellor's Department, which states
that lending institutions might offer the service through subsidiary companies in which they have only a minority shareholding.
It wants to know what conflict of interest is provoked by the size of the minority shareholding. It continues:
In particular, how small should an institution's holding be before it need no longer constitute a bar to the company undertaking conveyancing for borrowers?
There are ways to attempt to concede the principle which the Government have promised honourably to fulfil without making it so attractive that the building societies will do what is intended, but in fact they do not fulfil the promise. The promise was that banks and building societies would be allowed to do this for their customers. The alternatives are so silly that they will not work and they will be laughed out of court. Therefore, it is sensible to say what will happen.
The Bill will allow for the possibility of licensed conveyancers being employed by banks and building societies. It is for the council to decide at its own discretion in the interest of the profession. The building society

legislation next year will allow building societies to do conveyancing, the details of which will be defined by regulations. The regulations will have to provide what we want—full freedom to do conveyancing, employing their own solicitors or conveyancers, under certain restrictions defined by the regulations. Those restrictions would be to ban loss leading, to require the supervision of the Office of Fair Trading, to ensure that there is no compulsion on the borrower to have the conveyancing done by the same building society, and to ensure that in that small minority of cases in which a conflict of interest arises—and who better than solicitors to recognise a conflict of interest when they see one?—the solicitor representing the building society shall be required to advise the customer to get his own independent advice.

Mr. Alex Carlile: The lion. Gentleman suggests the supervision of the Office of Fair Trading. How does he suggest that that supervision should be carried out when one is dealing with the local branch of a building society? If he is suggesting that it should be carried out by trading standards officers, does he realise that they already have insufficient money to carry out their statutory duty and that they have no training in this or any similar sphere?

Mr. Mitchell: If that is the extent of the petty debating points which can be raised against the proposal, the case is unanswerable. There will be supervision by the Office of Fair Trading, to which people will be able to make complaints.

Mr. Alex Carlile: How?

Mr. Mitchell: Experience shows that building societies are far more sensitive to their public image, to public pressure and to complaints, and they are far more vulnerable than solicitors. Indeed, solicitors have been able to maintain a monopoly of conveyancing for many years, despite the protests of the public. As soon as the pressure develops that building societies should offer a range of choice and insurance policies, they do so. As a result, we now have three insurance companies recommended by building societies. The details can be worked out later. [Interruption.] That is the way in which legislation is normally passed, is it not? We define the principle, and we set out the procedures in regulations.
To conjure up such hypothetical fears is the feeblest of possible defences against the proposal. Let us be clear about what the solicitors are pleading against banks and building societies. The solicitors say, "We have perfect practice. Everything we do is perfect and efficient. We always inspect the property and supervise the conveyancing"—when it is done mainly by secretaries and clerks—"and we always advise the customer." That, in the main, is rubbish. Some solicitors work in that fashion while others do not. Probably most do not.
Against what is proposed, they are conjuring up the spectre of hypothetical fears and extreme cases. For example, in all the cases produced today, even by the hon. and learned Member for Montgomery, the building society would not have given a mortgage in the first place. After all, it is in the interest of the building society to ensure that it has good title, that the person should be able to repay the mortgage, and that it has a good relationship with its customers. The building society is, therefore, as well qualified to deal with these matters as solicitors.

Mr. Alex Carlile: Will the hon. Gentleman accept from me that he is wrong in his assumption that the


building society would not give a mortgage in the cases that I cited? In the Hull case, the building society was prepared to give a mortgage, but the solicitor advised the client not to proceed, and eventually the client accepted the solicitor's advice.

Mr. Mitchell: Will the hon. and learned Gentleman accept from me that the experience of the Halifax building society, with all its branches, is that it could find no cases in which solicitors had recommended against the mortgage offered by that society? That adequately covers the point that the hon. and learned Gentleman made about building societies being huge organisations thrusting piles of money at every borrower. That is a myth. Everybody knows how difficult it is to obtain a mortgage and how much scrutiny takes place by building societies into individual cases. As I say, it is in the interest of the society that the borrower is able to carry the mortgage and that the title is good.

Mr. Butterfill: My experience as a practising chartered surveyor is that most building societies—my firm acts for 32 banks and building societies—are interested only in the security of the loan. When banks and building societies lend small sums of money, secured against valuable property, they do not care whether there are serious defects in the property, which may be of great concern to the purchaser, so long as there is enough security in the property to guarantee the loan. Therefore, there is not always identity of interest between the purchaser and the building society.

Mr. Mitchell: Hon. Members are raising extreme cases. In every case that has been brought to my attention there have been strict inquiries. It must be agreed that, as a general proposition, the building society wants good title because it might need to realise the asset. Nor does it want the odium of turning people out of house and home if they cannot pay the premiums.
The hon. Member for Bournemouth, West posited an extreme and unlikely case, and that is true of all the arguments that have been adduced against this change. The conflict of interest argument is fallacious. People turn, in the first instance, to the building society. They go to a solicitor only after they have been to the building society. The two procedures—the conveyancing and the arranging of the mortgage—proceed concurrently but independently. That is what happens in the real world.
Nor are solicitors qualified to give the independent financial advice that is being raised now as a strong argument.

Mr. Weetch: I was told recently by the general manager—a highly qualified solicitor—of a major building society, one of the top six, that in 50 per cent. of cases the mortgage deed was prepared wrongly—it is a question only of filling in blanks—and that in many cases the wrong mortgage deed was returned. In other words, if the mortgage was being given by the Halifax, the deed sent back was, say, from the Alliance.

Mr. Mitchell: That corresponds with my experience in doing my own conveyancing in London. At one stage I received a communication from the solicitor representing the other side asking why the house was registered as two separate properties. I discovered that he had sent me

details of somebody else's house. That is the efficient care that is taken in these cases. I accept the evidence of the building societies about the inadequacy of work done by the solicitors.
The need for independent advice has been raised as a kind of bogey man to frighten us away from giving conveyancing to banks and building societies. Plainly, solicitors are not qualified to give that independent advice. If they are now putting themselves forward as providing financial advice, I welcome that because it is another area in which they want to compete. Nevertheless, most solicitors do not know the range of mortgages and building societies, and, more important, most solicitors have a vested interest in channelling customers to the building society in which they invest their funds, from which they get commission and with which they have a close working relationship. How can that be described as independent advice?
For the benefit of, among others, the hon. and learned Member for Montgomery, with his legal expertise, I shall quote a case to show that the legal evidence goes against the idea of the provision of independent financial advice by solicitors. The most important case was in 1962. In Bowdage v. Harold Mitchelmore and Company, the plaintiff, a games mistress, wanted to sell a piece of land. I need not go into the details. Mr. Justice Melford Stevenson said that a solicitor who acted for a client in relation to the sale of land could not be said, in the absence of special instructions, to undertake the duty of advising the client whether the transaction was, from the client's point of view, prudent.
In other words, it is not part of a solicitor's duty to give the sort of advice that is now put forward as an argument for stopping solicitors employed by banks and building societies from doing conveyancing. One cannot argue in favour of a practice which does not exist on a legal basis which is fictitious.
Sir Gordon Borrie, the Director General of Fair Trading, himself a barrister, said that if building societies were allowed to develop conveyancing, it would provide for
'one-stop shopping' for housing … and will lead to greater competition with others who provide such services, and this should benefit housebuyers whether they opt for 'one-stop shopping' or not because competition from building societies will keep everyone on their toes.
That is obviously true. The costs of conveyancing have come down by 20 to 30 per cent. We must keep up the pressure to keep those prices coming down. That means extending the competition to banks and building societies and not allowing solicitors to sit back, cosily saying, "There is no greater threat from licensing conveyancers. We can start upping the charges once again and milk the customer."
Sir Gordon Borne added:
Contrary to the views of the Law Society, I do not see any inherent or insurmountable conflict of interest if a building society were to provide conveyancing services to a purchaser who is also a borrower from that society. Both have a common interest in ensuring that good title passes from vendor to purchaser. The Law Society has stressed the value to the client of independent advice, for example, as to which building society to go to or as to whether a repayment mortgage or endowment mortgage would suit him best. Those matters seem to me more a 'selling point' for the independent solicitor's services than grounds for disallowing building society employed solicitors from providing basic conveyancing services.
What would be the position if banks and building societies were not allowed to carry out conveyancing,


which would be the effect of the new clause? The proposal at present comes really only from the Lord Chancellor, who is effectively out on a limb on this matter. I receive plaintive letters from him—some of them increasingly abusive, but they are mainly plaintive—telling me that I must realise that he is the embodiment not only of the law, but of the Government.
That cannot be true. If it is, it means that the Government are not fulfilling the honourable promises that were made to me and to the other sponsors of my Bill. If it were true, the Government would not be following their policy on competition and dealing with professional as well as public and financial monopolies. If it were true, the Government would not be following the wishes of the Department of Trade and Industry in this matter. They would be putting themselves in the ludicrous position of bowing to the vested interest of the Law Society—the new Scargill—which brings the Government, or at least the Lord Chancellor, quaking to their knees. The Government are saying to the Law Society, "Yes, you are right, we must betray our policies and act against competition. You, the Law Society, are such a powerful vested interest that we shall give way to you." The Government cannot afford to be involved in such a spectacle.
We are seeing Rumpole's last stand—the last stages of an ongoing, long-running comedy programme—but Rumpole in this instance cannot stop the tide of progress. Of course banks and building societies should be allowed to do conveyancing, and it is an essential part of competition.
There is a rapidly expanding market with new generations of house buyers. Some 70 per cent. of houses will be privately owned by the end of the century. People will sell and buy houses much more frequently. The turnover is growing all the time. This is a rich market in which there is room for everyone, but there must be competition to stop the vested interest developing. One does not create monopolies by widening competition. We must bring down prices and get people to compete to serve the customer.
We are seeing new methods and competition, prices falling, and new entrants to the market. All that is good for the public and for house buying because it makes house buying wider and more freely available. That is what we want to encourage and that is why the new clause is wrong. Neither the hon. Member for Bournemouth, West nor the Chancellor can stand in the way of this tidal wave of progress, which will engulf them both.

Mr. Roger Freeman: I cannot agree with the analysis by the hon. Member for Great Grimsby (Mr. Mitchell), because I do not believe that greater competition, which I agree is needed in this sector, is inconsistent with the importance of separating what may be in some cases a conflict of interest. He argued that the only way in which we can achieve greater competition in the legal profession's provision of conveyancing services is to ignore, or break down and throw away, the separation of interests that my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) outlined. I apologise for the fact that I was not here when the new clause was moved, and therefore did not hear all of my hon. Friend's speech.
The hon. Member for Great Grimsby said that he thought that most Conservative Members had a vested

interest in this matter. I have no vested interest in the conveyancing of houses. I am a chartered accountant, and therefore in an allied profession, but I am not involved in any way in the conveyance of property or the lending of money to those who purchase and sell property. Therefore, I do not fall into the category outlined by the hon. Member for Great Grimsby.
However, I have talked to the solicitors in my constituency. We have half a dozen firms in my provincial town, and I have discussed the Bill with them over the year and a half since the hon. Member for Great Grimsby first advanced his views. I have kept in touch with the local legal profession and sought its views and comments.
The solicitors in my constituency accept the principle of licensed conveyancing, if not with open arms. However, there are problems, on which I have some questions for my hon. and learned Friend the Solicitor-General. The problems arise out of one-stop shopping—permitting the bank to provide not only the money and the financial facility to exchange the property, but also a survey and the conveyancing. That concerns solicitors in my constituency and I shall advance some of their worries. I apologise to my hon. Friend the Member for Bournemouth, West if I repeat any of the points that he has made, but it is important that they are rehearsed clearly.
The new clause does not prohibit banks from offering conveyancing services to third parties. I do not agree with the hon. Member for Great Grimsby that banks and building societies that have licensed conveyancers on their staff would not be providing conveyancing services to others. It is obvious that they would provide those services to customers. Therefore, some of the economies of scale and of modern technology and greater competition would clearly apply in those cases. The new clause only stops banks from offering conveyancing services to customers with whom they are involved in providing finance.
It is important to emphasise that in my constituency the service of conveyancing is competitive. There is great competition between the firms of lawyers in the principal town. I know that, because I have checked it. I have looked at the way in which conveyancing fees have moved over the past five years and particularly in the past 12 months. There is no question but that that service is provided competitively.
I have another point to raise with my hon. and learned Friend the Solicitor-General. I am concerned that there are certain instances where the independent advice to the potential property owner is important. For example, in the two years in which I have represented my constituency I have come across many instances of the problem of rights of access. This has nothing to do with the value of the property; they are problems that the solicitor would point out to his clients. I wonder whether a licensed conveyancer working for a bank would not be tempted to cut corners by not exaggerating, or even not pointing out in clear language, the potential problems of rights of access.
Another example would be responsibility for upkeep on either a property shared in common or common party walls to property. Again, this does not necessarily affect the value of properties on which the loan transaction is based but it affects the rights of the property owner and his enjoyment of that property. There is also the problem of the rights of foreclosure on the mortgage loan, on which important and independent advice should be offered. A licensed conveyancer might be influenced by his


employer, the bank, in not drawing the attention of the customer with great clarity to what some of those rights and commitments are.
Impartial advice is also needed on finance. I have come across several instances in which the solicitor has asked whether his client is aware that alternative finance might be available at a cheaper rate than the rate quoted by the building society or whatever, a rate that appears to be a little on the high side. He might tell the client that it might be beneficial to shop around. Such impartial advice would not be available at a one-stop shop.
These are all examples of issues on which the solicitor or the licensed conveyancer should be providing advice for his clients. If he is employed by a bank with one-stop shopping I wonder whether this advice will be brought out as clearly as it should be. I agree that new clause 2 prevents solicitors from enjoying the benefits of commissions when arranging finance. My hon. Friend the Member for Bournemouth, West is being consistent—he is saying that banks should not be involved in the conveyance and that the licensed conveyancer for a firm of solicitors should not receive any other financial reward from the transaction.
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What sanctions will be available in regard to a group or bank which does not conform to the high standards adopted by most firms of solicitors? There are sanctions for solicitors and there will be sanctions for licensed conveyancers, but whence will the pressure come to ensure that high standards in banks are preserved?
The hon. Member for Great Grimsby said that some solicitors are inefficient, that some members of the great British public want one-stop shopping and that, because we want greater competition, we should permit banks to convey property through licensed conveyancers. He cares little for the so-called conflict of interest argument. I pay tribute to the hon. Gentleman's initiative during the past two years, but he will get competitive pressures in the profession through the introduction of licensed conveyancers offering a conveyancing service to customers with whom they are not involved financially.
Such competitive pressures will arise naturally. The benefits of those pressures are already obvious in my constituency. The customer is getting a good deal. We should consider whether it is wise to throw out, as the hon. Member for Great Grimsby has in a cavalier fashion, the benefits that must be worth serious consideration. Insufficient consideration has been given to the importance of independent advice. A solicitor or licensed conveyancer with no financial interest has a responsibility to ensure that the client is properly advised. I look forward to my hon. and learned Friend's comments. I have raised these issues because they have been raised with me.

Mr. Frank Field: I am not a lawyer, so, as I am not accustomed to being paid by the length of time that I am on my feet, I can be mercifully brief.
My hon. Friends have advanced two reasons why we should oppose new clause 2. The first is that we should oppose restrictive practices. I must declare a vested interest as a member of a political party that was brought into existence by the trade union movement and which understands the value of restrictive practices or, as we like to call them when talking about our own territory, checks

and balances. Before I am enticed into attacking restrictive practices, I should like to spend a little more time establishing where such an argument might lead me.
The second reason that has been adduced for opposing the new clause is that the market should decide the shape and size of firms servicing customers. My hon. Friend the Member for Ipswich (Mr. Weetch) said that those comments would thrill the right hon. Member for South Down (Mr. Powell). That might be the case, but they do not thrill me.

Mr. J. Enoch Powell: I have my name on the new clause anyway.

Mr. Field: That is indeed true. The market might well decide the shape of firms, or so the theory tells us, but the fact remains that we all favour competition if we are doing the competing but we never favour it if it operates against us. One of the natural laws of the market, therefore, is that people try to do deals to limit competition. I therefore do not find the two reasons for opposing the new clause persuasive.
The hon. Member for Bournemouth, West (Mr. Butterfill) painted a large canvas with a broad brush. Mine will be small. I should like to consider building societies and what I consider to be the growth of the new Leviathan. Building societies have recently taken over some of the functions of banks. People have asked what harm that has done. We are beginning to hear that the building societies believe that they should take over some of the functions of post offices and sub-post offices, such as the payment of pensions. If they get that deal, there will be wholesale closures of post offices, although building societies will not take on the full ranee of functions offered by post offices.

Mr. Austin Mitchell: It is no use conjuring up bogey men. My hon. Friend asked what harm it had done for building societies to go into competition with banks. What harm has it done?

Mr. Field: That development did no harm, but it does not follow logically that, because that did no harm, all following changes will do no harm. My hon. Friend and I will, as always, oppose the closure of sub-post offices if building societies get the job of paying pensions.
We have been asked to whom building societies are responsible. The answer is, very few except those who run them. Building societies already provide loans, are in league with house agents, undertake surveys, arrange insurance deals for property and try to persuade customers to take out indemnity policies for mortgages. The House has a right to draw a line and say that building societies already have enough power and influence without our adding yet another and important twist.
My hon. Friend the Member for Great Grimsby (Mr. Mitchell) has argued powerfully several times that Labour should use every opportunity to attack the extraordinary fees that some lawyers earn. I am in sympathy with that argument, but my hon. Friend's proposed solution is worse than the evil. If we want to limit the amount of money that lawyers can earn from conveyancing, there is a simple method—lay down a scale of fees for conveyancing. It would be more effective for the House to debate that proposal than to give building societies even more power as an indirect means of limiting the power of lawyers.
The two main arguments against the new clause do not persuade me. We have allowed building societies to


assume an extraordinary range of powers. So far, those powers have usually been exercised with considerable responsibility, but that does not necessarily mean that this will continue, and at this stage we say that building societies are big enough.

Mr. Nicholas Brown: I shall also try to be brief, and not just because I, too, am not a lawyer.
New clause 2, which the hon. Member for Bournemouth, West (Mr. Butterfill) and other hon. Members seek to add to the Bill, is designed to deal with conflicts of interest over conveyancing. The hon. Member for Bournernouth, West properly identified three separate areas of professional concern where the debate about conflict of interest is important. He made a strong point about solicitors acting as estate agents, particularly when a chain of sales is being handled by one firm. His point about insurance brokers also had merit. I shall deal later with whether or not it can be covered by regulation.
His third category occupied more time in Committee than any other item. New Clause 2 overstates its case in relation to this third category. All hon. Members agree that unfair practices should be prevented. The division between us relates to how it should be prevented and what constitutes a conflict of interest. Hon. Members also agree that we are living through a period of change. For that reason, if for no other, we should approach the problem in a measured way.
The view of the Opposition is that it would be possible, by regulation, for banks and building societies to provide an in-house conveyancing service. We object to new clause 2 because, whether intentionally or not, it completely closes the door to that possibility. The Opposition's view is that the interests of the consumer are best protected by a plurality of provision. We do not want building societies to establish, because of their power to make loans, a monopoly over conveyancing services. One of the tests of the regulations should be the maintenance of a plurality of provision, thus preventing unfair practices by building societies because of their control over the provision of finance.
There is a range of objections to banks and building societies providing an in-house service. The first objection falls into the category of special pleading. The case for rural solicitors was put very persuasively in Committee by the hon. Member for Nottingham, North (Mr. Ottoway) but his case did not persuade me. It was that the funding of rural solicitors was to be underpinned by those who seek to transfer their houses in rural areas. I am not sure that that is fair. People who live in rural areas should have the choice of a cheaper conveyancing service, if it is available.

Mr. Alex Carlile: What steps would a Labour Government take, bearing in mind what the hon. Gentleman has just said, to ensure that legal services continued to be made available on a broad front in rural areas?

Mr. Brown: Had the hon. and learned Member for Montgomery (Mr. Carlile) diligently attended the Committee proceedings, as did Conservative Members and my colleagues, he would have known that that matter was dealt with during our discussions on legal aid and law centres. But of course he did not diligently attend the

Committee proceedings. I do not intend to travel again over that ground, because that is not the issue with which we are dealing.

Mr. Carlile: Answer the question.

Mr. Brown: I shall deal next with my second point, on conflicts of interest. Genuine and perfectly proper objections can be made to building societies providing an in-house conveyancing service, but my view is that those objections can be met. There is no conflict of interest between the organisation providing the finance and the individual who, according to the title deeds, will eventually be the owner of the property. Both the individual and the organisation providing the money have a clear interest in achieving a secure title. However, a conflict of interest arises on financial advice.
It is wrong to expect an in-house conveyancer who is employed by a building society impartially to advise the purchaser of the property. The point was well made in Committee by the hon. Member for Great Grimsby (Mr. Mitchell) that many solicitors do not provide advice on these matters. House purchasers have already secured their mortgages before they ask somebody to handle the conveyancing side of the transaction, so it ought to be possible to make regulations to deal with this point. I understand that the Lord Chancellor does not intend to do this, but on this point the Bill is permissive and it would be possible for a future Government to make regulations to meet it. If the new clause is successful, that will not be possible.
At this stage, therefore, the Bill ought to be permissive so that we can return later to this matter. We should explore further the possibility of making regulations and be able to discuss this matter again. I have no doubt that we shall discuss it again, together with many other points that are contained in the Bill.

The Solicitor-General (Sir Patrick Mayhew): I, too, shall be brief but because I am a lawyer! I congratulate my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) on moving this new clause, thereby giving an opportunity to the House to discuss further the vexed question of how best to protect the public from advice tainted by interest while at the same time protecting the public from unnecessary restraints on competition. Although it has been a longer debate than many hon. Members expected, it has been of a very high quality.
The balance of the argument has been against the proposition of the hon. Member for Ipswich (Mr. Weetch) that the concern expressed by Conservative Members about conflict of interest is bogus. Many impressive speeches pointed to the real danger that a conflict of interest can arise.

Mr. Austin Mitchell: Mainly by lawyers.

The Solicitor-General: No, that is not right. My hon. Friend the Member for Kettering (Mr. Freeman) asked whether or not it was important that there should be independent advice on a number of matters—for example, about alternative means of financing loans and the responsibility for the upkeep of party walls. The question at issue is whether one should legislate to protect the public in all circumstances against such a risk or whether one should legislate on a less extensive scale and


rely, as my hon. Friend the Member for Ipswich said, on the ability of the public to choose advice elsewhere. It is far from easy to solve that problem.
As my right hon. and learned Friend the Attorney-General mentioned on Second Reading, the Farrand committee said:
The risks to the consumer are too great to permit market forces alone to control entrance to…the conveyancing market. Our approach in considering the safeguards needed for non-solicitors to undertake conveyancing has thus been to propose certain essential restrictions on competition, although these are intended to go no wider than is necessary to ensure adequate consumer protection.
That approach can be validly applied to the wider subject with which the new clause is concerned.
I wish to make clear the Government's position on conveyancing by employees of building societies and other financial institutions. We are committed to introducing legislation to permit banks and building societies to offer financial services and we are committed to doing so in a way that does not prejudice the consumer through conflicts of interest or anti-competitive practices. Both limbs of that commitment are important and both will be honoured.
The problem is that arrangements for a loan are an integral part of most conveyancing transactions and the lender's employee is inhibited in advising the borrower about the loan, because he owes his primary duty and his livelihood to his employer. That has meant that the difficulties in the way of lending institutions providing conveyancing services have proved more intractable than had been expected.
Since the consultation exercise on which we embarked, we have been examining ways of carrying forward our commitments. We have decided to amend the legislation that prevents all corporate bodies, including building societies, from offering conveyancing services. The Lord Chancellor will be empowered to exempt individual corporate bodies from the restrictions and to impose general conditions on the way in which the services are provided, to ensure that the consumers' interests are not prejudiced. The legislative mechanism will have to be flexible enough to enable new ideas to be implemented quickly and without the need for further primary legislation. We intend to take those powers in the next Session.
The new clause would prohibit any persons or bodies from providing conveyancing services if they also provided a loan, estate agency or brokerage services in the same or a related transaction. I hope that I have demonstrated that we share the anxieties behind the new clause. There would be a clear danger of conflicts of interest if mortgage brokers or insurance brokers formed partnerships or corporate bodies with licensed conveyancers. My hon. Friend the Member for Bournemouth, West drew attention to the significant sums that can be earned in commission. They are a plain source of temptation to temper the advice that might otherwise be given.
I do not need to take time over matters that have been extensively explored in the debate. However, we believe that the new clause is too sweeping in its exclusions. For example, it would rule out the present practice of the purchaser's solicitor drawing up the mortgage deed on behalf of the building society after the contract has been agreed and he has advised his client. That is a harmless, indeed beneficial, practice.
The Government's aim is to increase competition in conveyancing as much as possible, provided that proper consumer protection is maintained. We welcome measures to reduce the number of agencies that a purchaser has to deal with when moving house, subject to the overriding need adequately to protect the public from conflicts of interest. We see no difficulties arising if lending institutions offer services in transactions where they are not also providing a loan—my hon. Friend the Member for Kettering rightly pointed out that the new clause would not prevent that—but we have not yet found a way in which those institutions could provide a combined package of loans and conveyancing without risking unacceptable conflicts of interest. Lending institutions are commercial organisations and their interest is in the arrangements for the loan, as distinct from ensuring good title, and is not the same as that of the borrower.
Although we have not overcome the problem, we are continuing to work on it and one possibility under examination is that lending institutions might provide the services through subsidiary companies in which they hold only a minority 'stake. The Lord Chancellor recently met the chairman of the Building Societies Association and made it clear that the Government would welcome a solution that dealt with the problem of conflicts of interest. There is a genuine welcome for all constructive suggestions, but it would be irresponsible for us to pretend that problems do not exist.
We remain committed to increasing competition, we are determined to ensure that the interests of the consumer will be adequately protected when we introduce reforms, and we shall continue to build on the progress already made. Increased competition means that conveyancing services can readily be obtained at prices that are about one third lower than those prevailing a year or two ago, as was confirmed by my hon. Friend the Member for Bournemouth, West.
Licensed conveyancers will inject a further element of competition and such developments are enormously in the interests of all our constituents. Therefore, after what I have said about the Government's approach to this important matter, I hope that my hon. Friend the Member for Bournemouth, West will agree that, on balance, it would be better for him not to press his new clause, but rather to allow the Government to bring forward their proposals in due course.

Mr. Butterfill: Perhaps inadvertently, my hon. and learned Friend did not refer to my reservations about estate agents being involved in conveyancing and solicitors being involved in estate agency work. Will he comment on that matter and on whether it would be possible for the regulations that are to be drafted by the Lord Chancellor to be subject to the affirmative resolution procedure?

The Solicitor-General: I carried my enthusiasm for brevity too far. I shall deal with both those points. I shall report to the Lord Chancellor that my hon. Friend wishes the regulations to be subject to the affirmative resolution procedure. My noble Friend will consider that request, but I cannot give my hon. Friend any assurances.
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We have to face the fact that solicitors at present provide a combined estate agency and conveyancing package. I know that some hon. Members have reservations about that, and we understand the strength of


those reservations. Nevertheless, that is the position. We did not feel that the provision of a combined package of sale and conveyancing to vendors raised such overwhelming difficulties that we needed to urge the Law Society to prohibit it. At present estate agents cannot provide conveyancing services. Obviously, a solicitor could not provide conveyancing services to a purchaser if that solicitor was acting for the vendor. That is not permitted.
On the face of it, the present position puts estate agents at an unfair competitive disadvantage compared with solicitors, and therefore we are considering whether estate agents should be free to provide similar packages to vendors. Certain requirements would need to be met before those packages could be permitted, if they were to be permitted. We would need to ensure that the conveyancing work was properly supervised by a qualified person. Similar rules governing conflicts of interest would have to apply to estate agents offering conveyancing, as they do to solicitors in private practice. We shall need to consider whether special arrangements should be made to protect against conflicts of interest where an estate agent is selling more than one house in a chain. Comprehensive financial arrangements would have to be made to secure adequate consumer protection.
Subject to those essential requirements, we are considering whether estate agents should be permitted to provide the service so that they can compete on equal terms.

Mr. William Cash: My right hon. and learned Friend mentioned consumer protection, but he did not mention competence. In the context of estate agents providing conveyancing services at present practised by solicitors, does he agree that competence is extremely important, and that it is difficult to ensure that an estate agent will be competent to provide such legal services?

The Solicitor-General: That is right, but we are talking about employed solicitors or employed licensed conveyancers.
Incidentally, in a debate which has given rise to the figure of Lord Chancellor Rumpole, I agree that competence is of great importance in all these matters.

Mr. Butterfill: I am grateful to my right hon. and learned Friend for his many assurances. I must confess that I am a little disappointed with what he said about estate agents because I had hoped that the Government could find it preferable if neither lawyers nor estate agents were involved in a position where there could be a conflict. Nevertheless, I accept my right hon. and learned Friend's point that I may have gone further than advisable, and under the circumstances, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 3

PREVENTION OF ANTI-COMPETITIVE PRACTICES AND MONOPOLY SITUATIONS.

`For the purpose of preventing anti-competitive practices and monopoly situations or their development in the field of conveyancing services and services connected with such services by persons or bodies corporate involved in or directing or controlling such services, whether directly or indirectly, the Director-General of Fair Trading and the Secretary of State shall, from the date of the commencement of any of the provisions of Part II of this Act, keep the provision of those services under

constant review in pursuance of their functions respectively under the Fair Trading Act 1973 and the Competition Act 1980.'.—[Mr. Cash.]

Brought up, and read the First time.

Mr. Cash: I beg to move, That the clause he read a Second time.
I am deeply worried that we may be moving towards concentrating economic power in the hands of lending institutions. The new clause relates to part II of the Bill, which to a certain extent anticipates the building societies legislation that we expect next year. To prevent anticompetitive practices and monopolies or their development in conveyancing services and services connected with such services by persons who would be involved in directing or controlling those services, the new clause provides that the Director General of Fair Trading and the Secretary of State shall be obliged from the date of the commencement of part II of the Act to keep the provision of those services under constant review in pursuance of their powers and duties under the Fair Trading Act 1973 and the Competition Act 1980.
I received a letter from my right hon. and learned Friend the Attorney-General, in which he states:
We will have the opportunity to debate the economic power of the lending institutions, and its relevance to the question of whether they should be permitted to offer conveyancing services, when the provision enabling the Lord Chancellor to exempt `recognised' bodies corporate"—
that is, bodies recognised in clause 31—
from the restrictions on conveyancing for reward is brought forward next Session. I dare say the matter will also be touched upon on Wednesday.
He continues
As I said in Committee, we do not consider that any special provision is needed to protect against anti-competitive practices and monopoly situations in conveyancing when Part II of the Bill comes into force. We believe the existing legislation is sufficient.
I am deeply worried that the provision of conveyancing services under part II of the Bill will be part of a new monopoly by lending institutions regarding land tenure. In future, on an inevitably progressive basis, building societies and banks will provide estate agency, insurance brokerage, jobbing, stockbrokerage and conveyancing services.
There are strong arguments for effective international competition for economic institutions so that they can compete effectively abroad. However, there are significant dangers in the path that we choose to tread, because its consequence is to concentrate a vast amount of economic power in the hands of relatively few lending institutions. As a consequence, we may regret having followed that path, unless—I believe that this is both a classically Liberal and a classically Tory position—we are sure that anti-competitive practices and monopolies will not develop.
My right hon. and learned. Friend said that he did not think that it was necessary to have any special provision to deal with the problem because the powers under the Fair Trading Act 1973 and the Competition Act 1980 are sufficient. My point is that we must deal with the problem of anti-competitive practices and monopolies before, not when, they have accumulated. That is what my new clause provides.
When I looked over my notes on the subject I was particularly interested to see a quotation from the Nationwide building society's general manager on 2 April 1984. He said:


Within ten years, the number of building societies in Britain is likely to have shrunk from 200 to no more than 10, and these 10 will be almost indistinguishable from retail banks in the range of services they offer to personal customers.
Only four days ago, on Saturday 13 July, The Times announced that the Nationwide and Woolwich building societies were to merge, with £15 billion-worth of assets. Therefore, the trend is already being well established. Mr. Tim Melville-Ross, chief general manager of the Nationwide building society, is quoted in the The Times as having said:
the main reason for the merger was to create a society better able to take advantage of the new powers coming to building societies under legislation to be passed in 1987.
As we move into new areas of business it will be important for societies to have sheer size and financial strength … We will look to take advantage of most of the new powers under the coming legislation.
He seems to have made my point quite well. I believe that the trend will be followed by other building societies.
I have argued consistently and vigorously for the position adopted by the Conservative party—it is a conviction which I hold strongly—in favour of fair and free competition. The aggregation and accumulation of power by the lending institutions will seriously divert us from a principle which otherwise I would thoroughly applaud, unless it is monitored carefully from the beginning of the acquisition of the powers.
I support the principle behind the Bill and the extension to licensed conveyancers, provided that they are fully competent to do the sort of work which hitherto has been done exclusively by solicitors. It is impossible to argue that there is no connection between the Bill and the proposed building societies Bill or the provision of conveyancing services by banks. I have already made clear my objection to the provision of these services. That is borne out in principle by the White Paper "Financial Services in the United Kingdom." The provision of conveyancing services under these new arrangements is likely to become yet another of the financial services provided by the lending institutions.
In Committee I quoted a statement made by my right hon. Friend the Secretary of State for Trade and Industry. Referring to the financial services, he said:
The Secretary of State will have the power, to be exercised on the advice of the Director General of Fair Trading, to revoke or amend rules which have anti-competitive effects.
The same point is made in chapter 8 of "Financial Service in the United Kingdom," which states:
"(i) to apply a consistent framework of competition law throughout the financial services sector; and
(ii) enable the Secretary of State to require the Boards to amend or withdraw either of their own rules of those of organisations recognised by them if he is persuaded that such rules are detrimental to competition and not justified in the interests of investor protection."
A similar point is made on page 42 of the White Paper, which refers to the desirability of obtaining the advice of the Director General of Fair Trading. If what is good enough for the White Paper on financial services is to be applied to competition, the same provisions should be applied to conveyancing services.
Professor Payne of Alabama, a Warner professor of law emeritus, has made his position clear on the experience that the United States has gained from seeing conveyancing services fall into the hands of the lending institutions. I am not advancing an argument to support the

solicitors. My concern is to protect the consumer, not solicitors. We must ensure at the same time that we honour our commitment to competition. Professor Payne said:
In most parts of the United States conveyancing costs are higher than in England. In recent years they have become so outrageous as to incite prolonged hearings in the Congress and an investigation by the Department of Housing and Urban Development. For the high price the buyer pays he receives only a fraction of the services and protection taken as a matter of course on the other side of the Atlantic … Every unbiased observer admits that the American system works badly for everyone except the mortgagee. Chronic criticism of the system is voiced but gets nowhere because the lending institutions do not want change.
8.15 pm
Sir Gordon Borne has suggested that there should be a number of caveats on the provision of conveyancing by the lending institutions. He has said that these will be needed if the public are to benefit and continue to benefit from the new competition. He contends that competition will operate effectively only so long as the customer knows precisely what services are available to him. He believes that where the building societies provide a range of services to a single client, the services should be priced transparently. He considers it essential that there should be a "dose of official weed killer" to ensure proper and full competition in the provision of these services.
The new clause would effectively provide the sort of weed killer which the Director General of Fair Trading is proposing should be applied. It would ensure that we live up to the principles of competition to which we adhere. I hope that my right hon. and learned Friend the Attorney-General will be able to give me some specific assurances that we shall not engage in anti-competitive practices and monopolies when part II comes into force.

The Attorney-General: I well understand the anxieties of my hon. Friend the Member for Stafford (Mr. Cash), but I must limit my reply to the purpose of this part of the Bill, which deals with licensed conveyancers. Many of my hon. Friend's anxieties will be more appropriately expressed when we come to consider the building societies Bill next year.
I explained in Committee that the provision of conveyancing services is already within the scope of the Competition Act 1980. Investigations through the normal machinery—a a reference from the Director General of Fair Trading to the Monopolies and Mergers Commission, which in turn reports to the Secretary of State—are available. The new clause is really not necessary to enable us to deal with anti-competitive or monopolistic practices when part II comes into force.
It has been suggested that it would be preferable to prevent such practices arising in the first place by requiring the Director General of Fair Trading and the Secretary of State for Trade and Industry to vet rules drawn up by the bodies connected with conveyancing. Let us consider what is proposed in the Bill. The Lord Chancellor will not approve rules that allow anti-competitive practics to operate. He will, of course, consult the Secretary of State for Trade and Industry, who will no doubt take advice from the Director General of Fair Trading, before concurring with rules drawn up by the council to ensure that the sort of situation of which my hon. Friend is fearful does not arise. Thereafter, the Director General will keep under review the operation of licensed conveyancers as part of his general statutory duties to ensure that no


undesirable practices subsequently develop. In our view, that is entirely adequate, and there is no need for the special provision which the new clause promotes.

Mr. Cash: I am grateful to my right hon. and learned Friend for the clarity of his reply. I am glad to note the assurance that he has given. Therefore, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New Clause 4

SOLICITORS COMPLAINTS BOARD

`1.—(1) There shall be a body to be known as the Solicitors Complaints Board.

(2) It shall be the general duty of the Board to promote high standards of competence and professional conduct among solicitors and to ensure that those standards are sufficient to secure adequate protection for members of the public.

(3) Schedule [The Solicitors Complaints Board] to this Act shall have effect with regard to the Board.

2.—(1) The Board may, in pursuance of its general duty referred to in paragraph (2) of subsection 1, make rules, with the concurrence of the Master of the Rolls and after consultation with the Council of the Law Society, for regulating in relation to any matter the professional practice, conduct and discipline of solicitors, including rules for regulating the association of solicitors with other persons in connection with the provision of legal services to members of the public.

(2) If any solicitor fails to comply with rules made under this section any person may make a complaint in respect of that failure to the Board.

3.—(1) There shall be established two committees of the Board to be known as the Investigation Panel and the Adjudication Panel, constituted as provided by the Board by rules under this section and having, as from the appointed clay, the functions conferred or imposed on them by or under subsections 4, 5 and 6 of this section.

(2) Rules under paragraph (1) above—

(a) shall secure that a person who sits as a member of the investigation panel in the preliminary proceedings on any case shall not sit as a member of the Adjudication Panel in any subsequent proceedings on that case; and
(b) shall not come into force until approved by order of the Lord Chancellor.

(3) The power to make orders under paragraph (2) above shall be exercisable by Statutory Instrument subject to annulment in pursuance of a resolution of either House of Parliament and includes power to vary of revoke such an order by subsequent order.

4.—(1) The Investigation Panel shall have the functions conferred or imposed on them by this section.

(2) It shall be the duty of the panel to investigate any case in which—

(a) a complaint is made to the Board by or on behalf of a member of the public against a solicitor, in respect of the professional conduct of, or the services provided by that solicitor; or
(b) it is alleged that a solicitor—
(i) has (whether while a solicitor or otherwise) been convicted by any court in the United Kingdom of a criminal offence which renders him unfit to practice as a solicitor; or
(ii) has, while holding a practising certificate in force under the Solicitors Act 1974, failed to comply with any condition to which that practising certificate was subject; or
(iii) has failed to comply with any rules made by the Board under this Act; with a view to presenting the findings of such investigation to a Tribunal of the Adjudicating Panel for determination under subsection 6 of this section.

(3) For the purposes of paragraph 2(a) a complaint against a person who, at the time of the matters complained of, was an employee or associate of a solicitor shall be treated as a complaint against that solicitor.

(4) Any reference in paragraphs (2) and (3) to a solicitor includes reference to a person who was a solicitor at the time of the matters in question.

5.—(1) Where the Investigation Panel are satisfied that it is necessary to do so for the purposes of investigating any complaint made to the Board—
(a) alleging professional misconduct by a solicitor; or
(b) relating to the quality of any professional services provided by a solicitor,
the Board may give notice to the solicitor or his firm requiring the production or delivery to any person appointed by the Board, at a time and place to be fixed by the Board, of all documents in the possession of the solicitor or his firm in connection with the matters to which the complaint relates (whether or not they relate also to other matters)

(2) Sub-paragraphs (2) to (12) of paragraph 9 of schedule 1 to the Solicitors Act 1974, together with paragraphs 12 to 16 of that Schedule, shall apply in relation to the powers conferred by paragraph (1) as they apply in relation to the powers conferred by sub-paragraph (1) of paragraph 9 of that Schedule and accordingly in those provisions—
(a)any reference to the Society shall be construed as including a reference to the Board; and
(b) any reference to a person appointed, or to a requirement, under sub-paragraph (1) aforesaid shall be construed as including a reference to a person appointed, or to a requirement, under paragraph (1); and
(c) any reference to any such documents as are mentioned in sub-paragraph (1) aforesaid shall be construed as including a reference to any such documents as are mentioned in paragraph (1).

(6)—(1) The Adjudication Panel shall have the functions conferred or imposed on them by this subsection.

(2) It shall be the duty of the Panel to consider the findings of any investigation presented to them by the Investigation Panel with a view to taking one or more of the following courses of action:—

The panel may, in an appropriate case—

(a) dismiss the complaint or allegation; or
(b) administer a reprimand to the solicitor; or
(c) refer the case to the Solicitors Disciplinary Tribunal for hearing and determination; or
(d) refer the case to the Arbitration Service for hearing and determination under subsection 9 of this section;
(e) where the professional services provided by a solicitor in connection with any matter were in any respect not of the quality that could reasonably be expected of him as a solicitor,
(i) determine that the costs to which the solicitor shall be entitled in respect of those services shall be limited to such amount as may he specified in their determination and direct the solicitor to comply, or to secure compliance, with such one or more requirements falling within paragraph (2) as appear to them to be necessary in order to give effect to their determination;
(ii) direct the solicitor to secure the rectification, at the expense of the solicitor or his firm, of any such error, omission or other deficiency arising in connection with the said matter as they may specify:
(iii) direct the solicitor to take, at the expense of the solicitor or his firm, such other action in the interests of the client as they may specify.
(f) The requirements referred to in subsection (e)(i) are—
(i) a requirement to refund the whole or part or any amount already paid by or on behalf of the client in respect of the solicitor's cost in respect of the services referred to in that provision;
(ii) a requirement to remit the whole or part of those costs;
(iii) a requirement to waive, whether wholly or to any special extent, the right to recover those costs.

(3) The Panel shall give notice of any action which it takes under paragraph (2), and of the grounds for any such action, to the complainant and to the Law Society.

(4) Where it appears to the Panel—


(a) that any such allegation or complaint as is mentioned in paragraph 2 of subsection 4 ought to be referred to the Solicitor's Disciplinary tribunal for hearing and determination by that Tribunal; and
(b) that it is necessary for the protection of the public to do so,
the Panel may direct that any practising certificate held by the solicitor in question shall be suspended until the allegation or complaint is determined by the Solicitor's Disciplinary Tribunal or until the expiration of such period as may be prescribed by rule made by the Board, whichever is the earlier.

7.—(1) Subsection (2) of section 46 of the Solicitors Act 1974 (Solicitors Disciplinary Tribunal) shall be amended to read as follows—
(2) The Master of the Rolls shall, after consultation with the Solicitors Complaints Board and with bodies representing the interests of consumers, appoint the members of the Tribunal.

(2) After subsection (2) of section 46 of the Solicitors Act
1974 (Solicitors Disciplinary Tribunal) shall be inserted—
(2A) A person who is a member of the Council of the Law Society shall not be eligible to be a member of the Solicitors Disciplinary Tribunal.

8.—(1) The Board shall establish an Arbitration Service for the determination of cases arising out of a complaint to the Board in which compensation not exceeding £2,000 may be appropriately awarded.

(2) The Arbitration Service shall be constituted as provided by the Board by rules made under this section.

(3) Rules under paragraph (2)—
(a) shall secure that a person who sits as a member of the Investigation Panel in the preliminary proceedings on any case shall not sit as a member of the Arbitration Service in any subsequent proceedings on that case; and
(b) shall not come into force until approved by order of the Lord Chancellor.

(4) The power to make orders under paragraph (3) shall be exercisable by Statutory Instruments subject to annulment in pursuance of a resolution of either House of Parliament and includes a power to vary or revoke such an order by subsequent order.

9.—(1) The Arbitration Service shall have the functions conferred on them by this section.

(2) It shall be the duty of the Service to hear and determine any case referred to them under subsection 6 of this section.

(3) Upon determining any such case as is referred to in paragraph (2) the Arbitration Service may—
(a) award compensation to the complainant not exceeding £2,000; or
(b) dismiss the case.

(4) The Board may, with the approval of the Lord Chancellor, make rules providing for the procedure to be followed by the Arbitration Service when hearing and determining any such case as it mentioned in paragraph (2).

(5) If it appears to the Lord Chancellor that there has been a change in the value of money since the date when this section comes into force, he may by Order made by Statutory Instrument subject to annulment in pursuance of a resolution of either House of Parliament substitute for the sum specified in sections 8(1) and 9(3) such sum as is the then equivalent of £2,000.'.—[Mr. Nicholas Brown.]

Brought up, and read the First time.

Mr. Nicholas Brown: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take the following: New clause 8—Council for Legal Services—

'(1) For the purposes of Part I of this Act and the Solicitors' Act 1974 there shall be a body known as the Council for Legal Services.

(2) It shall be the general duty of the Council to ensure that standards of quality of service which can reasonably be expected of solicitors and of professional conduct among solicitors are upheld and enforced and it shall assume all the powers of the Law Society under the Solicitors Act 1974 for that purpose.

(3) Schedule 9 will have effect with respect to the Council.

(4) The Council shall appoint an Ombudsman who shall have responsibility for
(i) the investigation of complaints against solicitors in respect of quality of service and professional conduct
(ii) promoting conciliation in appropriate cases
(iii) unless falling within the jurisdiction of the Solicitors' Disciplinary Tribunal, in resolving complaints and applying the sanctions available to the Council under section of the Solicitors' Act 1974.

(5) The Solicitors Act 1974 shall have effect subject to the amendments specified in Schedule 10.'.

Amendment No. 1, in page 2, line 4, leave out clause 1

Amendment No. 2, in page 4, line 19, leave out clause 2

Amendment No. 18—New Schedule—

'THE SOLICITORS COMPLAINTS BOARD

Status

1. The Board shall be a body corporate.

Constitution

2.—(1) The Board shall consist of—
(a) no more than 15 solicitors of at least ten years standing; and
(b) no more than 10 lay persons.

(2) Members of the Board who are solicitors shall be elected by a postal ballot of all solicitors holding a practising certificate at the time of the election.

(3) Lay members of the Board shall be appointed by the Master of the Rolls after consultation with—
(a) the Board;
(b) relevant professional bodies; and
(c) organisations representing the interests of consumers.

(4) A member of the Council of the Law Society shall not be eligible to stand for election to the Board.

3.—(1) During the initial period the Board shall consist of a chairman and not more than 15 members (at least 5 of whom shall be lay members) appointed by the Master of the Rolls.

(2) In this paragraph the "initial period" means the period beginning with the establishment of the Board and ending immediately before the date fixed by the first scheme under subparagraph (3) for the coming into office of the first persons elected or nominated as members of the Board in accordance with the scheme.

(3) The Board shall prepare a scheme making provision as to—
(a) the election or nomination of persons for the purposes of sub-paragraphs (a) and (b) of paragraph 2(1).
(b) the tenure and vacation of office of persons elected or nominated as aforesaid, and the eligibility of persons for election or nomination.

(4) A scheme under sub-paragraph (3) shall not come into force until it has been approved by the Lord Chancellor and the first scheme shall be submitted to the Lord Chancellor for approval before the end of the period of one year beginning with the establishment of the Board.

(5) The Master of the Rolls shall after consultation with the members of the Board appoint a Chairman of the Board to hold office for the period of one year.

4.—(1) The Board shall have power to raise a levy on practising solicitors, which levy shall be charged on the issue or renewal of a practising certificate.

(2) The levy referred to in sub-paragraph (1) shall be sufficient to meet the expenses of the Board incurred in the performance of their functions under this Act.

Remuneration of members

5. The Board shall have power to pay to the members of the Board or any of its committees such fees for attendance and such travelling, subsistence or other allowances as the Board may determine.

Incidental powers

6.The Board shall have power to do anything which in its opinion is calculated to facilitate the proper discharge of its functions, including the borrowing of money.

Officers and staff

7.—(1) The Board shall have power to appoint such officers and servants as it may determine.

(2) The Board shall pay to its officers and servants such remuneration as it may determine.

(3) The Board shall, as regards any officers or servants in whose case it may determine to do so, pay to or in respect of them such pensions. allowances or gratuities, or provide and maintain for them such schemes (whether contributory or not) for the payment to or in respect of them of such pensions, allowances or gratuities, as it may determine.

Committees of the Board

8.—(1) The Board may establish a committee for any purpose (other than a purpose for which it is required to establish a committee by virtue of any provision of this Part) and may delegate to any committee established under this paragraph, with or without restrictions or conditions, as it thinks fit, the exercise of any function exercisable by the Board under this Part, not being—
(a) a power to make rules, schemes or standing orders under this Part;
(b) a function expressly conferred by this Part on any committee required to be established as aforesaid; or
(c) subject to any express provision for delegation in the rules, a function expressly conferred on the Board by any rules under this Part.

(2) The number of members of a committee established under this paragraph, and the terms on which they are to hold and vacate office, shall be fixed by the Board.

(3) A committee established under this paragraph may include persons who are not members of the Board (whether licensed conveyancers or not), but a majority of the members of any such committee (including the Chairman) shall be members of the Board.

Proceedings

9.—(1) The powers of the Board and of any of its committees may be exercised nothwithstanding any vacancy, and no proceedings of the Board or of any of its committee shall be invalidated by any defect in the election or nomination of a member.

(2) The Board may make standing orders for regulating the proceedings (including quorum) of the Board and of any of its committees.

Accounts

10.—(1) The Board shall keep proper accounts of all sums received or paid by it and proper records to those accounts.

(2) The Board shall appoint auditors to the Board, each of whom shall be a member of one or more relevant bodies of accountants.

(3) The Board shall cause their accounts to be audited annually by the auditors to the Board; and, as soon as is practicable after the accounts for any period have been audited, the Board shall cause them to be published and shall send a copy of them to the Lord Chancellor together with a copy of any report of the auditors thereon.'.

Mr. Brown: On Second Reading and in Committee the Opposition made clear their view that part I was inadequate for its purpose. We are conscious of the improvements that the Government have made and we have taken care to draft the new clause so that we can retain the benefits of part I as it stands. The problem is that all the major anomalies which were pointed out on Second Reading remain. Part I will not deal with the widespread public dissatisfaction with the present system. The largest single grievance is that the legal profession controls the mechanism for dealing with complaints against it. The National Consumer Council's MORI poll revealed that only 3 per cent. of those polled thought that this was satisfactory. No matter what hon. Members feel about the accuracy of opinion polls, one would have to allow for a wide margin of error to interpret 3 per cent. in favour as a vote of confidence in the status quo.
The new clause meets the point by setting up an independent body to deal with complaints. It will be professionally serviced by its own staff. The legal profession will have an important voice in its functioning. We are not anti the profession, but the solicitors will not

control this body. Thus, the public's objections will be met and the profession's reputation will be enhanced, because the public will have confidence in the complaints system.
The public's second major grievance against the present mechanism is over the confusing variety of avenues of complaint. The intractable nature of the complaints procedure and the tremendous obstacles faced in securing any financial remedy for a grievance will combine to make the ordinary complainant feel that the legal profession is ganging up against him. The new clause provides a focus for complaints and the possibility of redress.
It is difficult for a citizen to obtain advice and help when trying to come to grips with the negligence of his solicitor, and we provide for that. It is useless to point to the existence of the voluntary negligence panels. The Law Society has not bothered to monitor their performance, so we do not know how effective they have been. I have the experience of my constituents, whom I have tried to help, to guide me. My attitude is shaped by my practical experiences of the profession in Newcastle upon Tyne. I have no doubt that complainants are given the run around when they try to complain about solicitors. Whether that is the intention, or whether the present system makes it almost inevitable, I am not able to say. This injustice must be stopped, and our amendment does that.
If the abuse is not remedied now, public pressure, and perhaps a change of Government—or at least a change of Lord Chancellor—will make the pressure for reform later almost inevitable. The new clause is based on the Solicitors (Independent Complaints Procedure) Bill which was introduced by my hon. Friend the Member for Battersea (Mr. Dubs). I pay tribute to his pioneering work, which is very much appreciated not just by those who have the interests of the consumer at heart but by those who have the long-term interests of the profession at heart.
The amendments have been altered from their original wording to take account of the Coopers and Lybrand findings and recommendations and to make them compatible with the Solicitors (Independent Complaints Procedure) Bill. The Opposition have been working from the draft Coopers and Lybrand report, which someone was good enough to send me in advance of publication, and perhaps in advance of potential dilution. I like to think that it was sent to me by the Lord Chancellor, but the Attorney-General tells me that that is unlikely, to put it at its nicest.
The report tells the Law Society what the Opposition, the Legal Action Group and the National Consumer Council could have told it more cheaply. In short, the report says that the game is up. It urges an independent complaints procedure, a focus for complaints, a separation of the Law Society's trade union functions from its disciplinary ones, and arbitration. I was pleased that the report referred to the solicitors' trade union role in the same affectionate way as I referred to it in Committee.
The report says some unkind things about the speed and responsiveness of the Law Society's complaints procedure. It found that there was "a substantial backlog" and that
the Professional Purposes Department was under-resourced and inadequately staffed.
The report then criticised the department for its "extreme caution". Yet this is the institution in which, under part I of the Bill, the Government invite the general public to have continued confidence. The public will not have that confidence in it. They will rightly continue to feel cheated.
Perhaps the most worrying aspect is the Government's failure to develop a policy in advance of events. The pace of legislation has been dictated, not by the Government, but by the Law Society. The Government do not form a view until the Law Society has formed a view, which the Government then uncritically endorse. This is utterly craven. This wrong approach to reform has got the Government into the present mess. They are legislating in part I for the Law Society's last known view. However, the Law Society has just received a report from Coopers and Lybrand, which it commissioned, which says that the present view is wholly inadequate and untenable. On past form, when the Law Society changes its mind, the Government follow. It is therefore likely that we shall go over all this ground again and that the time of the House will have been wasted on part I.
There is a way out for the Government. To provide this way out we, as a responsible, helpful and constructive Opposition, have tabled the new clause. It could be that there are those with professional interests who hope that part I, as it stands, will appease the complaints. There may be those who hope to lose the contents of our amendments and the Coopers and Lybrand recommendations by delay and obstruction—in short, by adopting the same tactics which those who complain about solicitors say are used against them.
These proposals are our response to the present position. If that situation is allowed to deteriorate, due to neglect or deliberate obstruction, public pressure for a more thorough review of the Law Society's privileged position will become irresistible. I commend the new clause to the House and to the profession—in that order, not in the Government's order.

Mr. Alf Dubs: Earlier this year, I introduced under the ten-minute Bill procedure the Solicitors (Independent Complaints Procedure) Bill. Leave to introduce the Bill was given by the House without any opposition. Although it provoked an enormous postbag of mail from all over the country, I have not had a single letter or representation other than in support of the Bill's aims. I mention that legislation because these amendments are directly based on it.
I am grateful especially to the Legal Action Group but also to the National Consumer Council for their help in preparing the Bill and publicising it. There has been enormous support for that legislation. I have been astonished at the number of people who spoke to me, in the House and outside, and at the number of letters that I received not only from the very rich, who have complained bitterly about their solicitors, but from the very poor, whose lives have been seriously disrupted and damaged by disputes in which they believed that justice had not been done, although they complained about the solicitors who acted for them.
Of course, complaints against solicitors come from a minority of people. The bulk of our constituents are satisfied with the service that they get from solicitors. I am not seeking in any way to denigrate the whole profession. Nevertheless, an important minority feel seriously aggrieved because of their dealings with the legal profession. They feel that they have not received justice and believe that the method by which they can complain against solicitors is inadequate. They want changes.
I appreciate that the Attorney-General is embarrassed about this part of the Bill, because the Coopers and Lybrand report has appeared at the wrong time for him. I do not want to tread too much on his toes and dwell on his embarrassment, but it is obvious that he must be embarrassed. In a sense, I am sorry that circumstances have conspired to make that so.
The mystery surrounding the Coopers and Lybrand report puzzles me a little. I understand that it has been made available officially by the Law Society. I went into the House of Commons Library earlier today and asked whether it had a copy of the report. It assured me that it had not been able to obtain one from the Law Society. My hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) has one, and I have three copies. They all arrived by mysterious means in brown envelopes from sources about which I am not clear. If the Attorney-General is short of a copy or two, I have three. I do not need them all. I am genuinely puzzled about why the Law Society, knowing that the Bill was going through the House, and knowing that the part of the Bill dealing, with complaints against solicitors was coming before the House, did not move a little faster. I have reason to believe that the report has officially been out for about a week. Despite that, it has not reached the House of Commons Library. The Law Society is adding to the Attorney-General's embarrassment. If he is cross about that, I can only say that I agree with him.
8.30 pm
The Coopers and Lybrand report seems to be a sensible document. It makes its main criticisms of the present arrangements concisely. I should like to quote from paragraph 20 (a), (b) and (c) because that summarises the fault of the present system which is not put right by part I but which would be put right if the amendments were to be accepted. The first point is:
A conflict of role arises if one body, in this case The Law Society, is responsible both for handling complaints against solicitors and for carrying out the full range of activities of a professional representative association".
There is a contrast in the views of Ministers. They feel that there would be an unacceptable conflict of interest in regard to conveyancing if the same solicitor were to work for a bank or building society, yet they do not—unless I am going to be surprised later—share the view that there is an intolerable conflict of interest if the Law Society acts as a professional body on behalf of solicitors and investigates complaints against solicitors by members of the public.
The second point made by the Coopers and Lybrand report is:
the distinctions made between the different types of complaints are confused and extremely difficult for the public to understand".
The third point is:
the complaints handling process is slow, cumbersome, inefficient and unresponsive to change.
The case for the amendments is contained within those three criticisms. As my hon. Friend the Member for Newcastle upon Tyne, East said, the amendments are based upon the Bill, that I introduced, but have been adjusted to give more direct effect to the Coopers and Lybrand report.
It is essential to have an independent system for investigating complaints against solicitors. As has been made clear in the report, that would give a number of distinct benefits. First, if the suggested scheme were


adopted, there would be one focus for complaints. In other words, a member of the public who feels a sense of grievance would have only one place to go and could be satisfied that the complaint would be taken on from there. At the moment, the Law Society all too often says that it does not handle a complaint and it may suggest a different remedy to the complainant. The solicitor might be required to do the work again or to refund the money.
Some of those benefits exist in the scheme provided in the Bill. The solicitor might be reprimanded. The complaint might be referred directly from the new complaints body to the solicitors disciplinary tribunal or there might be an arbitration scheme that would make recourse to the courts in negligence cases involving up to £2,000 unnecessary. The last point would be especially beneficial because a complainant who feels aggrieved by his previous experience of the legal profession and perhaps the courts will not be happy if he is told that he has a remedy and can go to the courts. Of course, there is the money involved. Legal aid might help. However, it will not appeal to the average person who feels a sense of grievance to suggest that he or she should go through the whole cumbersome procedure again and possibly incur the expenditure of significant sums of money. That is why I am keen on the arbitration scheme which is suggested in the amendment.
There is another point of some importance which relates to a proposal contained in the Bill and which I think is unsatisfactory. I understand that, under the present scheme, the Law Society has a wide discretion to refuse to deal with a complaint. That is wrong. It is arbitrary and it may leave the complainant confused. Such a let-out would not be available to the new body dealing with complaints. It would be obliged to deal with all complaints. That proposal would be of immense benefit not just to the average member of the community who feels a sense of grievance but to the legal profession. I cannot think of a more invidious position for the legal profession to find itself in than the one in which it is now. There have been some notorious instances in which the complaints system, as handled by the Law Society, has completely broken down. I shall not take up the time of the House by repeating examples which have been mentioned previously.
If the Law Society wishes to sustain the present position or if it believes that the small improvements contained in the Bill are adequate, it is in difficulties. I contend that the Bill is inadequate.
If we pass the Bill and merely say, "Oh, well, we may get round to thinking about this again," we, shall be storing up trouble for ourselves. Even at this late hour in the Bill's life, the Attorney-General can say that he accepts the amendments. He has an alternative, which I put to him as a second best. The least that he can do is give a commitment that he will consider sympathetically the conclusions contained in the Coopers and Lybrand report with a view to early legislation. If the Attorney-General cannot do that, he is merely storing up difficulties for himself.
An enormous body of opinion in this country feels that we need the changes. They are of interest to many people. Until such changes are brought about, and until we have an independent system of investigating complaints against solicitors, many of us and many other people will not be satisfied. If we leave the matter tonight without a commitment for the future, it will not be long before we

shall have to legislate again. It would be a pity to say that we will do nothing now, put off the day and have to do something in a few years' time. That is not good enough. We owe more to the people who would like to see changes.
I hope that we can have some positive guidance from the Attorney-General. I hope that he will accept the amendments but, if not, I hope that he will give a clear commitment as to the action that he will take in the near future.

Sir John Farr: I welcome new clause 4, which has a good deal of merit. I hope that my right hon. and learned Friend will carefully consider some of the suggestions that he has heard from the Opposition because, although the Law Society supports the improvement contained in the Bill, some of us believe that the present arrangements, even with the improved machinery included in the Bill, will not be adequate.
I support the right of anyone to go to the complaints board. The complaints will then be referred to the investigating panel and to the adjudicating panel. That seems simple and straightforward.
I am grateful to the Law Society for writing to me only last month to explain the safeguards that exist in the Bill and the improvement that the Bill would make to the existing system. Even with that strengthened system, I believe that in practice there will be manifest failings. I say that because in the Bill, and in the letter from the Law Society dated 5 June, there is not one word about delay. I have serious misgivings about the way in which the Law Society conducts its affairs, because of the almost endless delay and prevarication that an ordinary Member of Parliament experiences in trying to obtain some form of justice for his constituents.
In the past 10 years, two of my constituents met with severe accidents involving head injury. In each case I had to approach the Law Society in trying to secure better compensation for them. I shall refer to my constituents as Mr. A and Mr. B.
Mr. A, who was involved in a serious car accident, was awarded about £27,000 for his injuries. It was a handsome and fair award, but the solicitor who acted for Mr. A presented a bill for about £23,000. Luckily, that was spotted and the solicitor eventually sent my constituent a cheque for the overcharge of £23,000 in his bill because of "a clerical error", as he put it. That was a disgraceful case of deliberate overcharging of a man who was not mentally able to cope with his affairs for himself. That solicitor should have been prosecuted for criminal negligence. That is the course that the Law Society said that it was considering four or five years ago. Although Mr. A has received back the £23,000 overcharge, there is no sign of a prosecution taking place.
Mr. B, who was also involved in a serious motor car accident, was awarded substantial damages of about £22,000. Again, that was a perfectly fair award. As with Mr. A, the machinery of the law proceeded in an adequate and normal way. But Mr. B's solicitors fell foul of the law by paying Mr. B directly £22,000 when he was manifestly mentally inadequate. In his mentally disabled state, Mr. B squandered the money and is now penniless. The solicitors handling Mr. B's case were in contravention of the law for, if a client is mentally incapacitated, they have a duty not to give him the money directly, as he is not able to be responsible for his actions. I sent particulars of that case to the Law Society between five and 10 years ago.


The last letter I had from the society was this week. I was reminded that the long recess was due and that the society hoped in due course to let me have counsel's opinion on whether the firm in question should be prosecuted.
In dealing with those two cases I met with extreme lack of interest, prevarication and blocking on the part of the Law Society. As far as I can see, it will be another 10 years or so before the obvious action will be taken. For that reason, if I have the chance to do so, I shall support the new clause.

Mr. Alex Carlile: The Glanville Davies case was an ill wind but it did a good deal of good. It swept like a hurricane through the Law Society in Chancery lane, and I believe that one of the most interesting results of that case is that it has actually changed attitudes among solicitors.
In paragraph 41 of the Coopers and Lybrand report, in which I think the authors are referring particularly to their contacts among solicitors, they say:
We have found widespread agreement with our broad conclusion that complaints handling should be transferred from The Society to a new and regulatory body separate from and independent of The Law Society".
They go on to say:
We have much less agreement about the nature and functions of the new body—not least because many had thought up to, but not beyond, the need for complaints handling to be independent of The Society.
However, it is not beyond the wit of man and not even beyond the wit of Government—even of this Government—that some means might be devised, and devised very quickly, to provide the independent procedure needed for dealing with complaints against solicitors.
It is notable that other professions and other bodies have already devised independent disciplinary procedures. The accountancy profession, which had to deal with the difficulty of being a profession split into different parts, has recently established a joint disciplinary scheme which applies to all members of four professional associations participating in the scheme. The scheme provides procedures for investigating the professional and business conduct of accountants of the four different types. The procedure enables their efficiency and their competence to be investigated in questions which give rise to public concern.
It is fundamentally offensive that the Law Society should carry out the two functions of representing solicitors and regulating solicitors. It is not necessary to expand the arguments beyond those broad but important professions of principle—a principle which, I believe, is widely held on both sides of the House. We would hope to hear tonight from the Attorney-General that the Government have not only taken note of the Coopers and Lybrand report—as, of course, they have—but have decided that in the next Session of Parliament, within the next few months, there will be legislation giving expression to that widespread agreement to which I referred in quoting from paragraph 41 of the report.

Mr. Austin Mitchell: The great majority of the solicitors—the collective noun is a "charge" of solicitors—who were present on the Government Benches during the debate on conveyancing, when the Government's mind was still open and the solicitors were wanting to close it

in a direction favourable to their interests, have now disappeared. I take it that that means that on this matter the Government have made up their mind and will not accept our new clauses. Nevertheless, it is still important to argue the case for the amendment, in the best interests of the legal profession itself.
My concern is for a profession which serves the public in all its problems, defends all its rights, and even puts the public interest and serving the public above its vested interest as a cosy profession. It is because of that emphasis that the Government should act in the profession's own best interest and accept the new clauses.
There is a sad contrast between the Government's behaviour on this matter and on conveyancing, and it is important to draw attention to that. When it comes to banks and building societies doing conveyancing, conflict of interest becomes paramount—so important that it can obviate the principle in the eyes of some. The Lord Chancellor can selfishly argue that one has to defend the income of solicitors because one does not want to pay more fees in legal aid to them. Conflict of interest there is all-important. But when we come to complaints against solicitors, where there is a real conflict of interest, it is ignored by the Government. That conflict is real and palpable and is felt by the public.
The Law Society cannot act as a trade union defending the vested interests of its members and as custodian of the public interest serving and dealing with complaints by the public. It cannot be judge, jury and accused in its own case. There is a real conflict of interest. If the Government regard conflict of interest as so important, why do they not do something about it and accept our new clauses, which get round the problem? The Coopers and Lybrand report makes clear in paragraph 23 what a conflict of interest is. It says:
some consider that The Society's complaints handling and representational roles are inherently in conflict, whatever arrangements are devised to minimise the conflict in individual cases; they are concerned that, despite rigorous efforts to eliminate conflict in those cases, there will still be cases in which it will occur. From our programme of interviews and consultations, we are impressed by the widespread perception of, and concern over, this basic conflict, both among members of the profession and among outsiders.
The question of conflict of interest is obsessive. Why will the Government not do anything about it? Our new clauses get round the problem. All Members who speak on legal issues are deluged with complaints about solicitors. One can understand some of the complaints, because people who lose do not like losing. But many of the complaints are about shoddy workmanship, inattention and inefficiency. They are justified complaints from which there is no redress. The Bill, as it stands, does not provide adequate redress. The Government will be serving the public well if they accept the new clauses.
Part I of the Bill is not satisfactory. There is no mention of a concrete code of written professional standards. The boundary between negligence and inadequate professional work is not defined. The Law Society is given wide discretion to deal with complaints, or to refuse to deal with complaints, and the shoddy work jurisdiction is almost entirely in the hands of the society. All that is wrong.
More important, events have overtaken the Bill and we are legislating nonsense. The report from Coopers and Lybrand manifestly says that the Bill is inadequate and that there has to be independent machinery. That is what we are proposing in the new clauses. Yet the Government are


determined to press on in the face of their own inadequacies. They are closing the case for legislation for at least two or three years, and giving us a stopgap measure which has been rejected by the society's own advisers.
I am aware that part I comes directly from the Law Society. Speaking as the political arm of the Law Society, the Lord Chancellor says that part I was requested by the society, and he is inclined to listen only to the society in this kind of case. That is an interesting comment on the source of the legislation. The Law Society's own management consultants, Coopers and Lybrand, say the proposals are inadequate and therefore the Government have a responsibility to think again. They should not push this House into nonsensical legislation which has been bypassed by events.
The Government will doubtless say that they want time to consult, but there was no consultation over part I before it was put into the Bill. In any case, consultation could take years, bearing in mind the way the profession functions. Coopers and Lybrand referred to an unacceptable gap of 11 years in the preparation by the society of a new guide to professional conduct. If that is the speed of consultation, it would be far better to do what we are proposing, which is to lay down the basic guidelines by way of the new clauses and to allow consultation to take place on how the basic guidelines are to be operated and filled in.
Parliament has a clear mandate from the public to act by ensuring that the new legislation is not nonsense. That is what it will be if we pass it unchanged. It should be not a stopgap, but legislation which will fulfil a public need. There is strong public feeling. All the opinion polls and our own correspondence show that. We need an independent review procedure for complaints. If the Bill is passed unamended, people will feel that Parliament is once again ignoring the public interest and getting into cahoots with a privileged profession in order to protect that profession from the standards of impartiality and independent review which are maintained in every aspect of life and in all other professions.

The Attorney-General: The canard was repeated by the hon. Member for Newcastle on Tyne, East (Mr. Brown). I assure him that there is no mole in ermine in this building, and that includes the Lord Chancellor. I suspect I know who it was.
We had a valuable contribution from the hon. Member for Battersea (Mr. Dubs), and all of us respect his work on this subject. I have expressed my admiration for him before, and I repeat it tonight. I should tell the hon. Gentleman that if the Library does not have the Coopers and Lybrand report it must be because it does not take the Law Society's Gazette, because it was published as a supplement to the Gazette on 10 July and was therefore available to anybody who needed it.
I wish that I could give to the hon. and learned Member for Montgomery (Mr. Carlile) the undertaking that within a few months we will introduce legislation. I cannot do that, for reasons which I shall explain in a little detail.
My old friend the hon. Member for Great Grimsby (Mr. Mitchell) invented yet another phrase—a charge of solicitors—which tempts me to think that he is the grouser of Great Grimsby. I hope that he will not sue me for that.
I hope that the House will forgive me if I take a little time, because this is an important subject and deserves to be dealt with in proper detail. It has been helpful to have

this opportunity so early after the publication of the report to debate the proposals for an independent solicitors complaints board, as reflected in the new clauses and in another way in the Coopers and Lybrand report, or what it calls the exposure draft of its report.
Before Opposition Members get too carried away with enthusiasm for immediate change, I must inject a note of caution. The first warning must be that whatever legislative changes might be needed to give effect to such proposals, they cannot be included in this Bill. It is far too late, even if there were settled policy, to formulate the additional clauses which would be needed to make the changes suggested in the Opposition new clauses or by Coopers and Lybrand. Not only would there need to be several new provisions to set up a solicitors complaints board, to describe its functions in detail and to prescribe its constitution, but there would have to be a line-by-line examination of the 80 or so sections of the Solicitors Act 1974 to see what should be removed, what retained and what amended. Therefore, the new clauses are defective, although I do not complain about that. I admire the huge amount of work that must have gone into them, and congratulate hon. Members on what they did.
9 pm
This debate will be helpful in assisting the Law Society in its deliberations on the report—we have already heard conflicting views, as one would expect, from the council of the Law Society—and the House will agree. on reflection, that rushed and ill-thought-out legislation is something that we would live to regret.
We are considering an exposure draft—a first report—as only one element in the first phase of the fundamental review of the society's functions and organisation now in hand. We must await the further reports from the management consultants on the other matters within their terms of reference. We must consider structure, staffing and systems, which have been expressly reserved by Coopers and Lybrand for later phases of the review, as is consideration of the society's representational functions and its role in legal aid administration. All those matters deserve careful consideration, and even if the society can form rapid decisions following the end of the consultation period in October—which I suspect is unlikely—if would be foolish then to press for early legislation and, therefore, miss the opportunity to take account of later proposals, which, in a sense, is the reverse of the accusations made against us in carrying on with part I.
The Coopers and Lybrand report proposes that a solicitors complaints board independent of the Law Society be created with the duty of investigating all complaints against solicitors. A central theme is that the new board would provide a one-door entry point for all complaints against solicitors., having power to impose sanctions in respect of less serious cases, but being able to pass on the more serious cases of misconduct and negligence to the solicitors disciplinary tribunal and the courts. That approach is only one option for change. The society, being rightly anxious to encourage as wide-ranging a debate as possible, has identified some alternative options. It might, for example, be possible to satisfy public concern through the creation of separate committees within the Law Society with responsibility for the investigation of, and the adjudication on, complaints against solicitors. It seems right that such alternative


approaches be considered. Whether we can accept them is another matter. The society has also identified some potential difficulties outlined in the Coopers and Lybrand report.
Those considering the report will no doubt wish to make an especially close analysis of the wide variety of factors which it brings together. The consultants—naturally enough, perhaps, having regard to the nature of their exercise—have tended to concentrate on the society's functions when considering possible improvements in the system for handling complaints. But this ignores the fact that the society is only one of three bodies with major functions in this area, and—hitherto, at least—has been exercising very much a subordinate jurisdiction when compared with the courts and the solicitors disciplinary tribunal.
We shall always have problems between any new body and the negligence jurisdiction of the courts, bearing in mind the real and immediate danger of prejudice to clients' interests. We must think carefully about the extent to which a single point of entry can work in this area. Further thought may need to be given to the relationships with the quality control aspects of taxation and remuneration certificate procedure. We may need additional consideration of the role of a lay observer, given the presence of lay representatives on the proposed new body. We must also consider accountability: to whom should that new body be accountable?
Those are some of the clearly difficult issues that must be resolved before the Government can invite the House to consider legislation for changes. The report acknowledges that there are no absolute answers here and that these are matters for judgment. It acknowledges that much existing criticism may relate to appearance as much as to reality. It refers to
a wider issue of public confidence, by no means confined to the Law Society, in the accountability of professional associations and the means of disciplining their members.
The criticisms that have been made of the lack of independent elements within the existing system disregard the part at present played by the solicitors disciplinary tribunal as a statutory body, independent of the Law Society, and the lay observer as an independent check on the society's handling of complaints against solicitors. Thus, even on the fundamental principle of an independent body, there is clearly more than one view. In his recently published report, the lay observer—and I shall not quote it all—made it quite clear that he took a contrary view, so the opinion, although it may so appear from the debate today, does not in fact lie all in the same direction. After the recent events in Wales, I think that we are now a little more suspicious of MORI polls than we were before. Therefore, the MORI polls which were quoted previously must be considered with a little suspicion.
The response to the consultation exercise which has now been embarked upon will assist the society in reaching informed decisions on all the matters raised in the Coopers and Lybrand report. It is right that the Government should wait until such time as this process is complete before forming a view of their own, but I assure the House that the Government have a completely open mind about whether a complaints system independent of the Law Society best suits the public interest.
I come to the points that were made by the hon. and learned Member for Montgomery. This is really an approach from a different angle, based on the report of the National Consumer Council. It is getting to very much the same end by rather different means. The points that I have made, as I am sure the hon. and learned Gentleman will appreciate, as a lawyer, about the Coopers and Lybrand report apply equally to him. I hope that he will forgive me if I do not go into great detail, because in a sense I would merely be repeating what I have said before. Whichever suggestion one takes—the Coopers and Lybrand report, which is merely the first stage of a much more detailed analysis, or the National Consumer Council report—these are matters which obviously need a great deal more consultation, and I am sure that, on reflection, the House would be the first to agree that hastily rushed through legislation does great harm in the end.
Part I contains a number of real benefits for the client. I would hate in any way to delay those, because, if we cannot have all that we want today, for the reasons that I have given, part I provides more safeguards for the public, which the House will generally welcome.

Mr. Dubs: The Attorney-General has been a little enigmatic. He says that the Government are completely open-minded about the possibility of an independent system for investigating such complaints. Can he give the House some idea of the possible time scale, on the assumption that this open-mindedness on the Government's part comes to an end and the Coopers and Lybrand report proves to be persuasive?

The Attorney-General: I think that I made it clear. We obviously must have the complete series of reports from Coopers and Lybrand. On the existing report, there is a consultation period ending in October. We shall want to see what the Law Society and others concerned say. It may well be that the bulk of opinion will be on the lines of Coopers and Lybrand. I want to have the other reports, because Coopers and Lybrand has reserved certain matters, to which I referred, for later reports. We do not want to have two bites at the cherry. Indeed, we have already been accused of having two bites.
We shall have to consider carefully the existing law about solicitors contained in the Solicitors Act 1974. I assure the hon. Gentleman that there will be no deliberate holding back by the Government. We shall move as fast as we can, but he will appreciate, as will all hon. Members, the difficulty in getting such matters into the programme of a coming Session. There is always great competition to include Bills. I give him the undertaking that there will be no feet dragging of any kind.

Mr. Nicholas Brown: The Attorney-General's reply was disappointing, though not unexpectedly so. We appreciate the Government's difficulties, even embarrassment, in this area. However, we feel it important to show the Law Society that Opposition Members mean business and we shall, therefore, press the matter to a Division.

Question put, That the clause be read a Second time:—

The House divided. Ayes 145, Noes 233.

Division No. 281]
[9.9 pm


AYES


Ashton, Joe
Beckett, Mrs Margaret


Atkinson, N. (Tottenham)
Beggs, Roy


Banks, Tony (Newham NW)
Beith, A. J.


Barnett, Guy
Benn, Tony






Bennett, A. (Dent'n &amp; Red'sh)
John, Brynmor


Bermingham, Gerald
Johnston, Sir Russell


Brown, Gordon (D'f'mline E)
Jones, Barry (Alyn &amp; Deeside)


Brown, N. (N'c'tle-u-Tyne E)
Kilroy-Silk, Robert


Brown, R. (N'c'tle-u-Tyne N)
Kirkwood, Archy


Brown, Ron (E'burgh, Leith)
Lamond, James


Bruce, Malcolm
Lead bitter, Ted


Buchan, Norman
Leighton, Ronald


Caborn, Richard
Lewis, Ron (Carlisle)


Callaghan, Jim (Heyw'd &amp; M)
Lewis, Terence (Worsley)


Carlile, Alexander (Montg'y)
Litherland, Robert


Carter-Jones, Lewis
Livsey, Richard


Clark, Dr David (S Shields)
Lloyd, Tony (Stretford)


Clarke, Thomas
Lofthouse, Geoffrey


Clwyd, Mrs Ann
Loyden, Edward


Cocks, Rt Hon M. (Bristol S.)
McDonald, Dr Oonagh


Cohen, Harry
McGuire, Michael


Conlan, Bernard
McKay, Allen (Penistone)


Cook, Frank (Stockton North)
McKelvey, William


Cook, Robin F. (Livingston)
MacKenzie, Rt Hon Gregor


Corbett, Robin
Maclennan, Robert


Cowans, Harry
McTaggart, Robert


Cox, Thomas (Tooting)
McWilliam, John


Craigen, J. M.
Madden, Max


Crowther, Stan
Marshall, David (Shettleston)


Cunliffe, Lawrence
Martin, Michael


Dalyell, Tam
Maynard, Miss Joan


Davis, Terry (B'ham, H'ge H'l)
Millan, Rt Hon Bruce


Deakins, Eric
Miller, DrM. S. (E Kilbride)


Dewar, Donald
Mitchell, Austin (G't Grimsby)


Dixon, Donald
Morris, Rt Hon J. (Aberavon)


Dobson, Frank
Nellist, David


Dormand, Jack
Nicholson, J.


Douglas, Dick
O'Brien, William


Dubs, Alfred
O'Neill, Martin


Duffy, A. E. P.
Park, George


Eastham, Ken
Parry, Robert


Edwards, Bob (W'h'mpfn SE)
Pavitt, Laurie


Ewing, Harry
Penhaligon, David


Farr, Sir John
Pike, Peter


Fatchett, Derek
Powell, Raymond (Ogmore)


Faulds, Andrew
Prescott, John


Field, Frank (Birkenhead)
Redmond, M.


Fields, T. (L'pool Broad Gn)
Richardson, Ms Jo


Fisher, Mark
Roberts, Ernest (Hackney N)


Flannery, Martin
Robinson, G. (Coventry NW)


Forrester, John
Rogers, Allan


Foster, Derek
Ross, Stephen (Isle of Wight)


Fraser, J. (Norwood)
Sheldon, Rt Hon R.


Garrett, W. E.
Short, Mrs R.(W'hampt'n NE)


Gilbert, Rt Hon Dr John
Silkin, Rt Hon J.


Godman, Dr Norman
Skinner, Dennis


Gould, Bryan
Smith, Rt Hon J. (M'kl'ds E)


Gourlay, Harry
Snape, Peter


Hamilton, James (M'well N)
Soley, Clive


Hardy, Peter
Steel, Rt Hon David


Harman, Ms Harriet
Strang, Gavin


Harrison, Rt Hon Walter
Taylor, Rt Hon John David


Hattersley, Rt Hon Roy
Thomas, Dr R. (Carmarthen)


Heffer, Eric S.
Torney, Tom


Hogg, N, (C'nauld &amp; Kilsyth)
Wainwright, R.


Holland, Stuart (Vauxhall)
Wallace, James


Home Robertson, John
Wareing, Robert


Howell, Rt Hon D. (S'heath)
Winnick, David


Howells, Geraint
Woodall, Alec


Hoyle, Douglas
Young, David (Bolton SE)


Hughes, Dr. Mark (Durham)



Hughes, Robert (Aberdeen N)
Tellers for the Ayes:


Hughes, Roy (Newport East)
Mr. Frank Haynes and


Hughes, Simon (Southward)
Mr. Sean Hughes.


Janner, Hon Greville





NOES


Adley, Robert
Atkins, Robert (South Ribble)


Aitken, Jonathan
Baker, Nicholas (N Dorset)


Amess, David
Baldry, Tony


Ancram, Michael
Batiste, Spencer


Arnold, Tom
Beaumont-Dark, Anthony


Ashby, David
Bellingham, Henry


Aspinwall, Jack
Bendall, Vivian





Bevan, David Gilroy
Grylls, Michael


Biffen, Rt Hon John
Gummer, John Selwyn


Blackburn, John
Hampson, Dr Keith


Boscawen, Hon Robert
Hanley, Jeremy


Bottomley, Peter
Hannam, John


Bottomley, Mrs Virginia
Hargreaves, Kenneth


Bowden, A. (Brighton K'to'n)
Harris, David


Bowden, Gerald (Dulwich)
Havers, Rt Hon Sir Michael


Boyson, Dr Rhodes
Hawkins, Sir Paul (SW N'folk)


Braine, Rt Hon Sir Bernard
Hawksley, Warren


Brandon-Bravo, Martin
Hayes, J.


Bright, Graham
Hayward, Robert


Brinton, Tim
Heathcoat-Amory, David


Brittan, Rt Hon Leon
Hickmet, Richard


Brooke, Hon Peter
Higgins, Rt Hon Terence L.


Brown, M. (Brigg &amp; Cl'thpes)
Hind, Kenneth


Browne, John
Hirst, Michael


Bruinvels, Peter
Hogg, Hon Douglas (Gr'th'm)


Buchanan-Smith, Rt Hon A.
Holland, Sir Philip (Gedling)


Buck, Sir Antony
Holt, Richard


Budgen, Nick
Howard, Michael


Burt, Alistair
Howarth, Alan (Stratf'd-on-A)


Butterfill, John
Howarth, Gerald (Cannock)


Carlisle, John (N Luton)
Howell, Rt Hon D. (G'ldford)


Carlisle, Rt Hon M. (W'ton S)
Howell, Ralph (N Norfolk)


Carttiss, Michael
Hubbard-Miles, Peter


Cash, William
Hunt, David (Wirral)


Chalker, Mrs Lynda
Hunter, Andrew


Channon, Rt Hon Paul
Irving, Charles


Chapman, Sydney
Jessel, Toby


Chope, Christopher
Johnson Smith, Sir Geoffrey


Clark, Dr Michael (Rochford)
Jones, Gwilym (Cardiff N)


Clegg, Sir Walter
Jones, Robert (W Herts)


Colvin, Michael
Joseph, Rt Hon Sir Keith


Coombs, Simon
Key, Robert


Cope, John
King, Roger (B'ham N'field)


Corrie, John
King, Rt Hon Tom


Couchman, James
Knight, Greg (Derby N)


Cranborne, Viscount
Knight, Dame Jill (Edgbaston)


Critchley, Julian
Knowles, Michael


Crouch, David
Lamont, Norman


Currie, Mrs Edwina
Lang, Ian


Dickens, Geoffrey
Latham, Michael


Dicks, Terry
Lawler, Geoffrey


Douglas-Hamilton, Lord J.
Lawson, Rt Hon Nigel


Dover, Den
Leigh, Edward (Gainsbor'gh)


Durant, Tony
Lennox-Boyd, Hon Mark


Dykes, Hugh
Lewis, Sir Kenneth (Stamf'd)


Eggar, Tim
Lightbown, David


Emery, Sir Peter
Lilley, Peter


Evennett, David
Lloyd, Ian (Havant)


Fairbairn, Nicholas
Lloyd, Peter, (Fareham)


Fallon, Michael
Lord, Michael


Favell, Anthony
Luce, Richard


Fenner, Mrs Peggy
Lyell, Nicholas


Fletcher, Alexander
McCrindle, Robert


Fookes, Miss Janet
McCurley, Mrs Anna


Forman, Nigel
Macfarlane, Neil


Forsyth, Michael (Stirling)
MacKay, Andrew (Berkshire)


Forth, Eric
Maclean, David John


Fowler, Rt Hon Norman
McNair-Wilson, P. (New F'st)


Fox, Marcus
McQuarrie, Albert


Franks, Cecil
Major, John


Fraser, Peter (Angus East)
Malins, Humfrey


Freeman, Roger
Mather, Carol


Fry, Peter
Maude, Hon Francis


Gale, Roger
Mawhinney, Dr Brian


Galley, Roy
Maxwell-Hyslop, Robin


Gardiner, George (Reigate)
Mayhew, Sir Patrick


Gardner, Sir Edward (Fylde)
Merchant, Piers


Garel-Jones, Tristan
Meyer, Sir Anthony


Gilmour, Rt Hon Sir Ian
Miller, Hal (B'grove)


Glyn, Dr Alan
Mills, Iain (Meriden)


Goodlad, Alastair
Mills, Sir Peter (West Devon)


Gow, Ian
Moate, Roger


Gower, Sir Raymond
Monro, Sir Hector


Grant, Sir Anthony
Montgomery, Sir Fergus


Gregory, Conal
Moore, John


Griffiths, Peter (Portsm'th N)
Moynihan, Hon C.


Ground, Patrick
Murphy, Christopher






Neale, Gerrard
Rost, Peter


Nelson, Anthony
Sainsbury, Hon Timothy


Newton, Tony
Shaw, Giles (Pudsey)


Nicholls, Patrick
Shersby, Michael


Normanton, Tom
Sims, Roger


Oppenheim, Phillip
Smith, Sir Dudley (Warwick)


Oppenheim, Rt Hon Mrs S.
Soames, Hon Nicholas


Osborn, Sir John
Speed, Keith


Ottaway, Richard
Stern, Michael


Page, Sir John (Harrow W)
Stevens, Lewis (Nuneaton)


Page, Richard (Herts SW)
Stevens, Martin (Fulham)


Parkinson, Rt Hon Cecil
Stewart, Andrew (Sherwood


Parris, Matthew
Stokes, John


Patten, Christopher (Bath)
Tebbit, Rt Hon Norman


Pawsey, James
Thompson, Donald (Calder V


Peacock, Mrs Elizabeth
Thompson, Patrick (N'ich N)


Pollock, Alexander
Thorne, Neil (Ilford S)


Porter, Barry
Thurnham, Peter


Portillo, Michael
Vaughan, Sir Gerard


Powell, William (Corby)
Viggers, Peter


Prentice, Rt Hon Reg
Wakeham, Rt Hon John


Price, Sir David
Walker, Bill (T'side N)


Proctor, K. Harvey
Wardle, C. (Bexhill)


Raffan, Keith
Wells, Sir John (Maidstone)


Rathbone, Tim
Wiggin, Jerry


Renton, Tim
Wood, Timothy


Rhodes James, Robert
Younger, Rt Hon George


Rhys Williams, Sir Brandon



Ridsdale, Sir Julian
Tellers for the Noes:


Rifkind, Malcolm
Mr. Archie Hamilton and Mr. Michael Neubert.


Rippon, Rt Hon Geoffrey



Roe, Mrs Marion

Question accordingly negatived.

New Clause 10

AMENDMENT OF ARBITRATION ACT 1950

`In paragraph (b) of section 7 of the Arbitration Act 1950 (party fails to appoint an arbitrator), the words after "appoint an arbitrator" to the end of the paragraph shall be replaced by the words "or does not do so within the time specified in the agreement or, if no time is specified, within a reasonable time, the other party to the agreement, having appointed his arbitrator, may serve the party in default with a written notice to appoint an arbitrator and, if the appointment is not made within seven clear days after the service of the notice, the High Court or a judge thereof may, on the application of the party who gave the notice, appoint an arbitrator on behalf of the party in default who shall have the like power to act in the reference and make an award as if had been appointed in accordance with the terms of the agreement.".'.—[Mr. Ottaway]

Brought up, and read the First time.

Mr. Richard Ottaway: I beg to move, That the clause be read a Second time.
Clause 57 blocks a loophole in the law of arbitration but creates an inconsistency. The clause is welcome in that it stops people being able to avoid appointing an arbitrator and therefore to avoid having a properly constituted arbitration panel but, as those who follow the debate on clause 57 in Committee will be aware, I was anxious that its approach was wrong in that it provided for a court appointment of a replacement arbitrator. I thought that a somewhat surprising decision in view of the weight of opinion of people in the arbitration profession who went to the Department of Trade and Industry to make their case. It is regrettable that their views did not prevail.
As a result of clause 57, section 10 of the Arbitration Act 1950 is inconsistent with section 7 of that Act. Section 7 provides that, when parties have agreed to refer a dispute to two arbitrators as umpire, in the event of default in the appointment of one of the arbitrators, a properly constituted panel becomes a sole arbitrator. Clause 57

provides that when there is a default in the appointment of an arbitrator, there are three arbitrators, and the second is appointed by the court. That is bad law and, inconsistent and should be remedied.
In Committee, I tried to provide consistency with section 7 of the 1950 Act but my proposal was rejected on three grounds. I should like to consider the arguments that my right hon. and learned Friend the Attorney-General used to reject my proposal. First, he said that a fundamental requirement was that the clause should provide that a dispute should be settled by a three-man arbitration tribunal. I have managed to comply with that requirement by providing in the new clause for a three-man arbitration tribunal. Secondly, he said that it was important for such a clause to have the blessing of the United Nations Committee on International Trade Law and that clause 53 should be in line with the model clause on arbitration. Again, I have got over that hurdle by providing in the new clause for a three-man arbitration panel, which is consistent with the UNCITRAL model code.
The most important point, however, is that the Government took the advice of Mr. Justice Mustill. To quote again my right hon. and learned Friend, he said:
Mr. Justice Mustill is probably the greatest expert on the law of arbitration … Mr. Justice Mustill is probably the leading expert of all time in this respect.—[Official Report, Standing Committee D, 4 July 1985, c. 196.]
I am happy to accept my right hon. and learned Friend's view of Mr. Justice Mustill. It is unfortunate that in Committee we did not have before us a letter dated 26 February 1985 from Mr. Justice Mustill to Lord Hacking. Referring to sections 7 and 10 of the Arbitration Act 1950, he said:
We accept that section 7 provides a precedent for party-appointment. There is, however, much to be said for the view that it is an anomaly, which should not be perpetuated. The Advisory Committee will have to look at sections 7, 10 and 25 together, since they do not really add up.
The unfortunate point about clause 57 is that it does not take Mr. Justice Mustill's advice but looks in isolation at section 10. All I am seeking to do in the new clause is to follow Mr. Justice Mustill's advice by taking sections 7 and 10 together. I have adopted in my new clause the Government's wording of clause 57. Having deployed my right hon. and learned Friend's arguments in Committee and having adopted the Government's wording in the new clause, I hope that he will be able to accept it.

The Attorney-General: I admire my hon. Friend's great ingenuity, but I am afraid that I still have to disappoint him. I appreciate that his approach is consistent and unobjectionable but the problem is that it goes beyond the intention of clause 57, which was designed to fill a specific gap in the Arbitration Act that had been identified by the Mustill committee on a temporary basis—I emphasise "on a temporary basis"—prior to consideration by the departmental advisory committee on arbitration for the reform of arbitration law in the light of the UNCITRAL model. The solution chosen in clause 57 was recommended by the sub-committee and it was adopted in the UNCITRAL model law. As yet there is no evidence that section 7 is creating difficulties for arbitrators but the ingenuity shown by my hon. Friend will be drawn to the attention of the sub-committee.

Mr. Ottaway: Although I am somewhat disappointed, I am reassured by the assurance of my right hon. and learned Friend that the matter will be looked at. Therefore, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 6

PREPARATION OF CONVEYANCING DOCUMENTS BY UNQUALIFIED PERSONS

The Attorney-General: I beg to move, in page 10, line 9, at end insert—
'(5) After that subsection there shall be inserted—
(4) A local weights and measures authority may institute proceedings for an offence under this section.".'.
In Committee I undertook to introduce an amendment to empower trading standards departments, which formerly were known, probably inappropriately, as weights and measures authorities, to undertake prosecutions for breaches of section 22 of the Solicitors Act 1974. This amendment gives effect to that undertaking. For some time, the arrangements for prosecuting illegal conveyancers have been regarded as unsatisfactory. The Royal Commission on legal services recommended that the Law Society should cease to undertake such prosecutions. No statutory requirement is imposed on the Law Society to do that, and it has assumed responsibility rather by default. That has given rise to presentational difficulties, because it has not been sufficiently recognised that when the Law Society initiates such prosecutions, it is not being selfish and acting in its own interests, but is acting to protect the public.
We have been exploring alternatives and it has been agreed that local trading standards departments should take responsibility in this area. That seems to be a sensible move.

Amendment agreed to.

Clause 8

INCORPORATED PRACTICES

Amendments made: No. 5 in page 11, line 17, leave out
`of that Act shall also'
and insert
',or (as the case may be) section 23(1), of that Act shall'.

No. 6, in page 11, line 24, at end insert

'or (as the case may be) under the said section 23.'.—[The Attorney-General.]

Clause 14

ISSUE OF LICENCES BY COUNCIL

The Attorney-General: I beg to move amendment No. 9, in page 15, line 38, at end insert—
'(4A) Where—

(a) an application for a licence is made in accordance with section 13 by a person who, at the date of the application, already holds a licence under this Part; and
(b) no new licence is issued to him in pursuance of the application before the time when his existing licence would, apart from this subsection, expire in accordance with subsection (4),
his existing licence shall not expire at that time but shall continue in force until a new licence is issued to him in pursuance of the application or, if the application is refused by the Council—

(i) until the end of the period within which an appeal may be 'Drought against the refusal under section 28(1)(a); or
(ii) if such an appeal is brought, until the appeal is determined or abandoned.'.

Mr. Speaker: With this, we may take Government amendments Nos. 10, 13, 19 and 21 to 24.

The Attorney-General: In Committee, the hon. Member for Newcastle upon Tyne, East (Mr. Brown) moved an amendment to clause 11 designed to ensure that licensed conveyancers should not be prevented from practising when their application to renew an existing licence was not dealt with in time by the Council for Licensed Conveyancers. I undertook to bring forward an amendment to cover the point.
As so often happens, while we were considering the matter raised by the hon. Gentleman, other issues arose which are covered by the amendments grouped with No. 9. Two remove from the council the power to revoke recognition of a body corporate on the grounds of fraud or error and enable the discipline and appeals committee, which is a much better body, to exercise that power. That fits in with the respective roles of the council and the committee under part II.
Two other amendments introduce a right of appeal against refusals to grant recognition to bodies corporate, whether of licensed conveyancers or of solicitors. An amendment to schedule 3 ensures that the council's rule-making powers regarding proceedings before the discipline and appeals committee is sufficiently flexible.

Amendment agreed to.

Amendment made: No. 10, in page 16, line 1, leave out
'of expiry of his previous licence'
and insert
'when his previous licence expired in accordance with subsection (4) (or would have so expired but for subsection (4A))'.—[The Attorney-General.]

Clause 31

PROVISION OF CONVEYANCING SERVICES BY RECOGNISED BODIES

Amendment made: No. 13, in page 29, leave out lines 26 to 28.—[The Attorney-General.]

Clause 68

SHORT TITLE, COMMENCEMENT, TRANSITIONAL PROVISIONS AND SAVINGS

The Attorney-General: I beg to move amendment No. 17, in page 56, line 28, leave out 'and 55 to 64' and insert ', 55 to 61 and 63 and 64'.
This is a technical amendment to the commencement provisions, correcting the reference to the sections that will come into force two months after Royal Assent.

Amendment agreed to.

Schedule 2

INCORPORATED PRACTICES SUPPLEMENTARY PROVISIONS

Amendment made: No. 19, in page 60, line 26, at end insert—

Appeal against refusal of Council to grant recognition

1A.—(1) Where the Council refuse an application by any body corporate for recognition under section 8 of this Act, that body may appeal to the Master of the Rolls against that refusal within one month of being notified of it.

(2) On an appeal under this paragraph the Master of the Rolls may—

(a) direct the Council to grant recognition of the body in question under section 8 of this Act; or
(b) affirm the refusal of the Council;
and he may make such order as to the payment of costs by the Council or by that body as he thinks fit.

(3) Rules made by the Council with the concurrence of the Master of the Rolls may make provision, as respects any application for recognition that is neither granted nor refused by the Council within such period as may be specified in the rules, for enabling an appeal to be brought under this paragraph in relation to the application as if it had been refused by the Council.

(4) The Master of the Rolls may make regulations about the procedure for appeals to him under this paragraph.'.—[The Attorney-General.]

Schedule 4

THE DISCIPLINE AND APPEALS COMMITTEE: SUPPLEMENTARY PROVISIONS

Amendment made: No. 21, in page 75, line 41, leave out from 'relation' to end of line 8 on page 76 and insert
'to proceedings before the Discipline and Appeals Committee under this Part.

(2) As respects proceedings before the Committee under section 25,'.—[The Attorney-General.]

Schedule 6

BODIES RECOGNISED UNDER S.3I: SUPPLEMENTARY PROVISIONS

Amendments made: No. 22, in page 85, line 26, at end insert—

'Revocation of recognition on grounds of fraud or error

6A.—(1) Where the Discipline and Appeals Committee are satisfied that the recognition of a body corporate under section 31 was granted as a result of any error, or as a result of fraud on the part of that body, the Committee may, if they think fit, by order revoke that body's recognition.

(2) A body corporate may be granted recognition under that section notwithstanding that any recognition previously granted to it has been evoked under this paragraph; but if any such recognition was so revoked on the ground of fraud that body shall not be granted recognition under that section except on an application made in that behalf to the Committee.

Appeal against decision of Council in relation to grant of recognition

6B.—(1) Where, in the case of any body corporate, the Council—

(a) refuses an application by that body for recognition under section 31; or
(b) decides to grant recognition of that body under that section subject to any restrictions,
that body may appeal to the Discipline and Appeals Committee against that refusal or decision within one month of being notified of it.

(2) On an appeal under this paragraph the Discipline and Appeals Committee may—

(a) by order direct the Council to grant recognition of the body in question under section 31, either without restrictions or subject to such restrictions falling within subsection (3)(d) of that section as may be specified by the Committee in the direction; or
(b) affirm the refusal or decision of the Council;
and the Committee may make such order as to the payment of costs by the Council or by that body as they think fit.

(3) Rules made by the Council may make provision, as respects any application for recognition that is neither granted nor

refused by the Council within such period as may be specified in the rules, for enabling an appeal to be brought under this paragraph in relation to the application as if it had been refused by the Council.'.

No. 23, in page 85, line 28, leave out sub-paragraph (1).

No. 24, in page 85, line 33, after 'Paragraphs', insert '1(2),'.—[The Attorney-General.]

The Attorney-General: I beg to move amendment No. 25, in page 86, line 10, leave out
'that Part of that Schedule'
and insert
'Part II of Schedule 5'.
This is a minor drafting amendment which corrects an insufficiently clear reference in schedule 6.

Amendment agreed to.

Schedule 9

TRANSITIONAL PROVISIONS AND SAVINGS

Amendment made: No. 27, in page 91, line 25, at end insert—

'Restriction on preparation of papers for probate etc.

5A. Where a person has committed an offence under section 23 of the Solicitors Act 1974 before the commencement of section [Preparation of papers for probate etc. by unqualified persons] of this Act, he shall not be liable after that commencement to be proceeded against in respect of that offence unless the act constituting that offence would have constituted an offence under section 23, as substituted by section [Preparation of papers for probate etc. by unqualified persons] of this Act, if it had been in force at the time when the act was done.'.—[The Attorney-General.]

Order for Third Reading read.—[Queen's and Prince of Wales's Consent signified.]

The Attorney-General: I beg to move, That the Bill be now read the Third time.
I am grateful for the high quality of our debates tonight, and, in particular, in Committee. As so often happens, the criticisms made of the Bill relate generally not to what is in the Bill, but to what people think should have been it it.
As is so often the case when the Government introduce change, far from satisfying the reforming element in us, it serves only to increase the appetite for more. We have been asked to move immediately towards the establishment of an independent body to deal with complaints against solicitors, and we have spent a good deal of time discussing whether banks and building societies should be permitted to offer services. The House will have the opportunity to return to both those issues in due course. The Coopers and Lybrand review of the Law Society is still in its early stages. We await with interest the developments in that area as the exercise progresses. Legislation to enable the Lord Chancellor to exempt bodies corporate from the restrictions on conveyancing will be introduced next Session. I am sure that many hon. Members present tonight will reappear then to air their views on how those powers should be exercised.
The provisions of the Bill are familiar to hon. Members. The speeches from hon. Members on both sides of the House have been largely constructive and helpful, and the Bill has undoubtedly been greatly improved by all


our efforts. My hon. and learned Friend the Solicitor-General and I are grateful to the right hon. and learned Member for Aberavon (Mr. Morris), to the hon. Member for Newcastle upon Tyne, East (Mr. Brown), and to all those who have played a part in tonight's debate for their assistance, and for the good will which has coloured our proceedings. I commend the Bill to the House.

Mr. Nicholas Brown: In concluding my speech on Second Reading, I said that the Bill was more to be commended for effort than for achievement. The Bill is an under-achiever, and many hon. Members may eventually feel that it was not worth the effort. I have no doubt that part I will not stand the test of time. Part II timidly and cautiously introduces the new profession of the licensed conveyancer. We wish the new profession well, and believe that it will benefit the consumer. However, the question of in-house work by building societies remains unresolved.
I noticed, as did many hon. Members, that the long title of the Bill is drawn wide. At one stage I considered introducing an amendment to set a statutory retiring age for Lord Chancellors. However, I must not refer to what is not in the Bill, which is frustrating, as most matters which should be in the Bill are not.
Despite the issues that divide us, and the occasional charges of vested interest and counter-charges of ignorance, the Report stage, like the Committee stage, was reasonably good natured. In that spirit I shall draw my remarks to a close by putting in a kind word for the Attorney-General. He has had his problems in recent legal affairs debates, and the Opposition have always sought to help him constructively. Recently he had to respond to the loss of the disreputable original clause 22 from the Prosecution of Offences Bill and the equally disreputable original clause 43 from this Bill when both clauses were defeated in the other place. He had to explain why the Government retreated from their original promise to my hon. Friend the Member for Great Grimsby (Mr. Mitchell) on banks and building societies, and he had to defend part I of the Bill, which has been superseded by events. In Committee, he could advance only the worst of arguments to defend the present state of our defamation laws—that he could not afford to change them because of the cost. He was clearly embarrassed by the lack of coherence in the present state of law centres.
I shall now come to the good word. To all those points the Attorney-General's ultimate response was, as it had to be, "I am only the agent of the Lord Chancellor." To be fair to the Attorney-General, that is the only respectable excuse available to him.

Mr. Cash: I am glad to have taken part in the proceedings, and I thank my right hon. and learned Friend the Attorney-General for the courtesy that he has shown throughout. I wish the Bill well.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.

Rates (Edinburgh)

The Secretary of State for Scotland (Mr. George Younger): I beg to move,
That the Rate Reduction (City of Edinburgh District) 1985–86 Report, which was laid before this House on 3rd July, be approved.
I should like to start by setting the action that we have taken against Edinburgh in the context of our policies on local authority expenditure as a whole and then set out the reasons why we have taken action against Edinburgh this year.
On any measure, local authority expenditure is a significant feature of the economy. What Scottish local authorities spend accounts for half the programme of public expenditure in Scotland for which I am responsible. In the United Kingdom as a whole, local authority expenditure accounts for a quarter of public expenditure. Given the range of services provided by local authorities, this is not surprising, but it does emphasise the fact that no Government can leave local authority expenditure out of their economic calculations. I do not think that Labour Members would disagree with that. Certainly their policies when last in office confirm that they agree with us that local authority expenditure cannot be ignored and has to be controlled in the pursuit of national economic aims.
Local authority expenditure in total is still too high. It is still above the level it was when we came to office, although I am glad that increasing numbers of authorities are now reducing their expenditure and budgeting to spend within guidelines. In 1984–85, 15 authorities budgeted to spend within guidelines. This year, the number is 30, and I hope to see continued improvements.
The problem of local authority expenditure is increasingly becoming a problem of a small group of authorities. If we look at this year's overspenders, of which there were 35, 12 were within 3 per cent. of guideline and 16 were within 6 per cent. Of the remaining seven all except one were within 8·1 per cent. of guideline All these 34 authorities have of course suffered grant penalties but, under the new improved arrangements that we have introduced, if they bring their spending down to guideline at outturn, they will have their penalty returned. There is no reason why this money should be lost to ratepayers if authorities take action now and reduce their expenditure.
The exception to this pattern of overspending is Edinburgh district council with its massive overspend against guideline of 48 per cent. On any test this planned expenditure is excessive and unreasonable and action simply has to be taken in the interests of the city's ratepayers. However, before I turn to the details of the case against Edinburgh, I should like to trace briefly the history of the term "excessive and unreasonable" as applied to local authority expenditure and linked to the power to take selective action.
Although the origins of the power are in the local government legislation of 1929, the power to take action against an individual local authority on the grounds of excessive and unreasonable expenditure, and on which, in amended form, we are taking action against Edinburgh, is set out in the Local Government (Scotland) Act 1966. It is therefore a measure put on the statute book by Labour Members when they were in power. We have, of course,


amended and improved it so that we can operate on planned expenditure and return the savings to the ratepayers. However, the basic concept of selective action is contained within legislation for which the Labour party was responsible and for which the ratepayers are. I am sure, grateful.

Mr. Tom Clarke: Is the right hon. Gentleman really telling the House that the guidelines had statutory backing in 1966?

Mr. Younger: No, I did not refer to guidelines. I merely pointed out that the ability to take selective action for excessive and unreasonable expenditure was proudly introduced by a Labour Government. It may be significant that the Minister who introduced that measure has since joined the Social Democratic party. I leave it to the Opposition to judge whether that has any significance.
We have initiated selective action on 14 occasions. The total of savings achieved over the years is over £80 million and there have been significant benefits to ratepayers. For instance, the rate of Lothian regional council went down by 25 per cent. over two years. It is, of course, a power to be used only when an authority is clearly planning excessive and unreasonable expenditure. Last year, no authority fell into that category. This year, one authority has stood out and I should now like to turn in detail to the reasons why I initiated action against Edinburgh and why, having considered the representations it made in response to my action, I have decided to lay this report before the House.
It is necessary only to set out the basic statistics for Edinburgh's expenditure plans for 1985–86 to make an overwhelming case for selective action. The figures speak for themselves and I shall remind the House of them. Edinburgh is planning to exceed its guideline by no less than 48 per cent. This is a massive excess and it is six times greater than the next highest excess. If all authorities had overspent by 48 per cent. local authority expenditure in Scotland would have been no less than £1,289 million higher than it is.
If I heard the hon. Member for Glasgow, Garscadden (Mr. Dewar) correctly when he was speaking on the radio this morning, he made it clear that he would have nothing to do with supporting any defiance of court rulings or any contempt of court by a local authority. I hope that he will confirm that sensible and statesmanlike statement when he speaks this evening. However, he must go rather further if he is to satisfy the House of his and his party's bona fides in this matter. We require a clear statement from the hon. Gentleman whether he fully supports all the actions of the Labour administration of Edinburgh district council, including its rating plans, expenditure plans and the increase in rates which these plans involve. He owes it to the House to make it clear whether these plans have his full support in every detail.
Edinburgh's excess expenditure of 48 per cent. represents £17·2 million in cash, which is almost 20 per cent. of the total overspend of all Scottish local authorities, although at guideline level Edinburgh's expenditure accounts for only 1·2 per cent. of guideline provision. Without Edinburgh's contribution, the spending performance of Scottish local authorities would look much better.
The level of spending against guideline is not the only test, and on every other way of considering the figures Edinburgh stands out from all other authorities. Its planned level of spending per head is, at £114, the highest of any district council, and almost double the district average of £62. It is well above the average of comparator authorities and above each comparator individually.

Mr. Tam Dalyell: Is the right hon. Gentleman aware that there are other ways of judging an overspend of £17·2 million? That sum is a quarter of that which was ladled out to Johnson Matthey Bankers and the cost of five days on the Falklands.

Mr. Younger: Yes. It is probably a much smaller sum and a much smaller percentage if it is compared with all that we spend on the Health Service or the education service in Scotland. It can be compared with anything one chooses. Surely it is fair to compare Edinburgh with its nearest comparator authorities and other local authorities generally. I have no doubt that it is difficult to run a local authority but it is the easiest matter in the world to run one if no attention is paid to the amount of money required to do it. The skill is in matching resources to requirements and it is that which we are criticising this evening.
The level of growth planned at a time when we are asking authorities to reduce their spending is staggering. Edinburgh is planning to spend in real terms—that is, making full allowance for inflation—33 per cent. more than it spent last year. The comparable figure for districts as a whole is 1·8 per cent. Compared with what the council was spending in 1978–79, it is now planning to spend 68 per cent. more in real terms after fully allowing for inflation. The comparable figure for districts as a whole is 8·3 per cent.
Thus, on any test, Edinburgh is planning expenditure which is excessive and unreasonable. The cost of that to the ratepayes is heavy, and it is their interests which selective action is designed to protect. When I initiated selective action, I therefore proposed a reduction in the rate of 5·2p to reduce Edinburgh's excessive expenditure and return the savings to the ratepayers in the form of reduced rates. A 5·2p rate reduction, if translated into expenditure savings, would reduce Edinburgh's expenditure by £16·145 million. That would still leave it £1 million above its guideline. That is a 3 per cent. excess compared with the average for all other districts of 2·7 per cent. Thus, in my proposals I am not even expecting Edinburgh to come down to its guideline or even the average excess over that guideline of other authorities. After making such a reduction, its expenditure per head would, at £79, still be above the district average of £62 and the average for its comparators. It would still be above all the comparators individually except one, and above all the cities except Glasgow, which has special expenditure needs. The level of spending after selective action would still be 16 per cent. in real terms above what the council was spending in 1978–79, and that is double the district average. Thus, I do not believe that, in proposing a rate reduction of 5·2p, I am asking Edinburgh to do the impossible when one sees what authorities as a whole, and comparable authorities, are doing.

Mr. Malcolm Bruce: Does the Secretary of State accept that, while what he says is true in respect of a complete financial year, by imposing this cut halfway


through the financial year he is requiring a cut of about 50 per cent.? That will have a chaotic effect on the city's administration.

Mr. Younger: The hon. Gentleman is correct. I shall be covering that point in a few moments. I hope that I am not to take it from his intervention that he supports what Edinburgh is doing. I should have expected him and his party to support this measure.

Mr. Bruce: indicated dissent.

Mr. Younger: I hope that we shall be told whether the Liberal and the Social Democratic parties support Edinburgh. We are entitled to know.
I invited Edinburgh to submit representations on my proposal and I have studied the full comments which it sent me. I, together with my hon. Friend the Minister responsible for home affairs and the environment, met representatives of the council when they expanded on those representations. The council's representations and a note of our meeting are included in the report which I have laid before the House. However, I am bound to say that nothing said in the representations or at our meeting leads me to change my view that the council is planning excessive and unreasonable expenditure, or that it is unreasonable for it to be asked to cut its expenditure by the equivalent of a 5·2p rate.
The representations of the district council contain a vast amount of detail about services. The implication seems to be that any reduction in the level of services that it has in mind is unacceptable. For the reasons I have given, however. I believe that the expenditure consequences of what Edinburgh proposes are quite unreasonable, and must be reduced. I note that Edinburgh is not arguing that any lesser reduction in its plans would be preferable.
I shall comment on some of the general points which Edinburgh makes. First, it is much concerned that the overall effect of the two statutory steps that I have taken against—it the order which is before us today and my order requiring a reduction in its rate fund contribution to the housing revenue account—is to point to a level of expenditure implied in the budget proposed by the local Conservative group. It suggests that my proposals therefore flout the views of the local electorate. But I stress to the House that that line of thought is not relevant to the order before us, which, as I shall explain, is very generous to Edinburgh. The coincidence, to which the district council's line of criticism relates, does not occur unless one also takes into account my housing order. The reasonableness of that order by itself has, of course, been upheld in the courts.
The whole argument about the coincidence is in fact wrong-headed. My decision to look for a reduction of 5·2p was based on the considerations I have mentioned, including consideration of the average excess over guideline of all districts, a figure which would not be known to the Edinburgh Conservative group. Of course, my action on the rate fund contribution, including the precise amount in rate poundage terms of the reduction I required, was initiated before the local Conservative group was even involved in budget-setting at all.
Secondly, the council is critical of the guidelines against which its expenditure has been judged. Those guidelines are based on client group assessments built up service by service on the basis of discussions with the

Convention of Scottish Local Authorities. The assessments are, of course, not perfect and are being refined in consultation with the convention. However, Edinburgh is not being expected to budget at its client group assessment. Many hon. Members might wish that their local authorities were similarly treated. Its guideline is fixed at 7·7 per cent. above it in recognition of its 1984–85 expenditure level and to give it a realistic target. Its 1985–86 guideline was described recently by an independent academic commentator as "generous", and is 11 per cent. more in cash than last year—an increase well above the rate of inflation, which again many other authorities in Scotland would be glad to have.
Thirdly, Edinburgh complained of the other authorities with which it had been compared. Those were chosen on the same basic method as we used to choose comparators in 1982–83 and 1983–84 as authorities whose expenditure need was most like that of Edinburgh, taking account of factors that have been found to affect expenditure. In its representations, Edinburgh compares itself with the other three cities. However, even on that basis, Edinburgh,s still well out of line. It is planning to spend £114 per head That is 34 per cent. more than the average of the three cities., which is £85 per head. It is also planning to spend more than each of the other cities individually.
We are now asking Edinburgh to bring its spending down not to guideline but to about 3 per cent. above it. In terms of last year's budget, that is about 3·5 per cent. less in real terms than the planned level of spending for 1984–85. Thus, it cannot be said that we are proposing huge reductions in basic services. If such massive reductions happen, it will be because of the course followed by the council of ignoring all the signs arid pressing on with spending plans well above that level until it has no choice but to look for major economies in existing services.
However, behind all those figures are the ratepayers. Edinburgh's rate for 1985–86 is 22·7p. If it had budgeted to spend at guideline and in line with its rate fund contribution limit, that figure would have been cut by a third. That is a measure of the cost of Edinburgh's plans to its own ratepayers. What is more serious, perhaps, is the effect that Edinburgh council's activities have on the businesses is the city and those considering expanding or coming into the city to create jobs. Rates push up business costs and force businesses to look at ways of cutting down on staff. High rates discourage firms considering setting up in Edinburgh when they know that one of their main costs is in the hands of an unpredictable high-spending council.
At present, on the information available to us, Edinburgh is spending regardless of the action which has been taken against it and building up its expenditure to ever higher levels. I should like to take this opportunity to give Edinburgh a serious warning about the dangers of the course it is following. The longer Edinburgh takes to recognise the consequences of the action being taken against it and start reducing its expenditure, the harder it will be for that city.
Every month's delay, indeed every week's delay, means progressively sharper cuts when cuts eventually are made, as they will have to be. The longer the decision to cut is put off and the longer the build-up of unnecessary expenditure, the smaller will be the number of months available over which the required savings will have to be made. It is clear that, even if Edinburgh takes action at the


end of July, it will still have to spend at a level of 4 per cent. below its guideline for the remainder of the year if it is to keep within the expenditure level implied by the rate reduction I propose.
If Edinburgh delays that decision for another month until the end of August, it will have to spend 10 per cent. below guideline for the rest of the year. Another month's delay would make the situation even worse, as it spends inthe first half of the year the money that is meant to last the whole year. That raises the prospect of Edinburgh being unable to provide proper services and inflicting damage on the city and on its own employees. Defiance and delay will only damage the citizens of Edinburgh and the employees of the council in a way which could do lasting harm to Scotland's capital city.
The figures I have quoted make it abundantly clear that Edinburgh is planning excessive and unreasonable expenditure. The consequences of that for ratepayers are serious, and what I propose in this report by way of a rate reduction of 5·2 p will provide welcome relief to them. I am not asking the council to make unreasonable reductions, only to come down to a reasonable and still above-average level of spending.
This debate is not about a complaint by me or my hon. Friends that Edinburgh is spending more than last year or that it is spending more than we think it ought to. Edinburgh is entitled to do that if it wishes to do so. The debate is about a level of spending which is so extreme, unreasonable and excessive that by any level of calculation something must be done about it. I hope we shall get a clear statement from the hon. Member for Garscadden not only that he deplores any attempt to defy the law, but that he does not support this extreme level of overspending. I hope that we shall have a clear statement from the Liberal party and, if possible from the Social Democratic party about their position; and whether or not they support the interests of the ratepayers of Edinburgh. If ever an argument was put before the House for excessive and unreasonable expenditure requiring action to be taken, it is before us this evening, and I ask the House to support the order.

Mr. Donald Dewar: I regret that we are having this debate at a rather late hour, crushed into a slot at the fag end of the day. However, it has its consolations. I particularly welcome the Minister of State, Foreign and Commonwealth Office, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), who has made an unexpected appearance in Scottish affairs. I suspect that he is practising. We shall watch developments with interest. We are facing a confusing situation, and that applies in particular to Edinburgh district council. This order is the result of a quite extraordinary exercise in misplaced ingenuity. It is part of what may be described as an obsessive campaign. Sometimes one tends to forget that because of the milk and water and rather limp style of the Secretary of State and the matter of fact way in which he performs at the Dispatch Box. But there is a ferocity of purpose, and we have seen what can fairly be described as a vendetta not just against Edinburgh but against local government in Scotland.
A battery of assault weapons has been deployed. They came creaking forward and were laboriously manoeuvred

into position over a number of parliamentary Sessions. Now they are in place and the Government intend to use them to try to bombard and destroy the budget of Edinburgh district council.
First, the rate fund contribution limitation order asks that £5·8 million be taken out of the rate fund contribution. It sounds a formidable excess, but, of course, it is an excess over a limit which was chosen arbitrarily by the Secretary of State. It is simply an effort to ensure that, in a city where rents are already considerably above the Scottish average, they are forced even higher. It is extraordinary brass neck for the Secretary of State to say, "It is all right, because the courts have said that my order is reasonable." What the courts said was that Parliament for good or ill has pronounced and they could do nothing about it. His statement that that is an argument in favour of what he is doing shows the complete poverty of his case. It is monstrous that, as a friendly interim gesture, the Secretary of State has clawed that £5·8 million out of the capital fund for housing. I hope that that will be repaid if and when the rate fund contribution target is met.
Secondly, the general abatement represents a penalty of £9,455,000, which neatly excises Edinburgh's entire rate support grant for 1985–86. One problem is that about £2 million has already been paid. During Scottish Question Time recently, the Secretary of State said that he is pondering how to get the money back. I do not know whether he has reached a conclusion, but I hope that he has more constructive and important matters about which to worry than that.
If the Government force through this order tonight, the £16·3 million that will be clawed back will, in any event, largely eliminate the general abatement. It will be reduced from £9·5 million to about £1 million.
That underlines the fact that this is a nasty and remarkable case of overkill, because, in addition to the two matters to which I referred, we have the section 5 clawback, which is embodied in this order, of £16·3 million or the equivalent of 5·2p on the rates. The position is remarkably confusing, and it has not been helped by the Secretary of State's speech. He seems to work on the assumption that, since he is right and everyone else is wrong, he need not produce an argument or an intelligent case in support of the order.
The product of the Government's proposal is clear. If we combine the rate fund contribution order and the order that we are discussing tonight, Edinburgh is being asked to make cuts of about £23 million well into the financial year. Whatever else we may disagree about, it is clear that that will be a painful and damaging process. I hope that Ministers recognise that.
The Secretary of State tried to justify his position with a flurry of figures. He paraded his disapproval in his usual prim fashion, as though he was discussing some unacceptable conduct with a member of his family. But the position is much more serious than that, and the case that he has made, even on his figures, is nothing like as conclusive as he wishes us to believe. The tragedy is that, in the eyes of the Under-Secretary of State—the hon. Member for Edinburgh, South (Mr. Ancram)—and his colleagues, we have almost reached the point at which every job that is created in local government is a sin, every facility that is opened is an offence and every additional collection or service is an indiscretion. That is not a sensible conclusion.
The comparisons that have been used in Edinburgh's case are bizarre. Kyle and Carrick and Edinburgh have something in common—they are in Scotland—but beyond that it is difficult to understand why they have been linked. Many of the figures quoted by the Secretary of State sound massive in percentage terms, but we should remember that Edinburgh started from the low base inherited from the previous authority. If we consider the figures for 1983–84 for expenditure per head and employees per 1,000 of the population, we see that Edinburgh started from a low base compared with other Scottish cities.
Of course, Edinburgh has set out to try to improve services. It had a mandate to do so. There was no dishonesty or deceit. In the election campaign, the Conservative group consistently campaigned on what it described as the irresponsibility of the Labour programme, but the people of Edinburgh voted for it. There is no doubt that the district council has a mandate to which it is entitled.

Mr. Younger: Can the hon. Gentleman refer to any pre-election programme put out by the Labour party which said that rates would be going up by 79 per cent.?

Mr. Dewar: The Labour group fought an honest campaign in which it stated its plans for services. Indeed, if the right hon. Gentleman is saying to me that people in Edinburgh were not aware of the consequences of voting Labour, then he is passing an enourmous vote of no confidence in the political efforts of his own party.

Mr. Michael Hirst: Is the hon. Gentleman prepared to do what the leader of his party is not prepared to do—support the gross overspending of Edinburgh district council? Will he stop equivocating and give the House a straight answer yes or no?

Mr. Dewar: The hon. Gentleman will have to wait until I have completed my speech. If I may say so, every month he sounds increasingly more pompous. He will have to watch that.
This should be taken as a serious debate. One matter that Conservative Members should consider is the criteria that ought to apply. We are certainly not being invited to set ourselves up as a surrogate district council. We should not be asked to vote on the basis of whether we would have introduced such a budget. That is not the test that should be applied on this occasion.
If we consider the figures per head for cleansing services, environmental health, leisure and recreation or libraries and museums—we can give the figures if hon. Members want them—and compare them with those of other cities, in some areas Edinburgh is spending more and in others less, but ultimately it is not a gap which any reasonable man, in my view, would say justifies the extraordinary action that we are being invited to take in terms of the excessive and unreasonable expenditure contained in the order.
I do not believe there is anything inherently wicked in decent, humane services. It may be that the electorate of Edinburgh would want to vote to cut services and to have lower rates. On this occasion, the electorate voted to increase services. I do not believe that it is the job of Parliament to prevent the Edinburgh district council from carrying out that mandate and answering ultimately for what it does at the ballot box. That is the nature of local

government. Except in the most extraordinary circumstances, we should not interfere. I do not believe that we have reached that point.
The recreation budget, for example, is £21·2 million. If the Secretary of State has his way, that will be cut to £13·2 million. It is not just a matter of forgoing over £3 million of growth—perhaps the Tories would say that there should be no growth in difficult times—it is finding where to make cuts of over £3 million, which will hurt. I do not believe that it is the business of the House to interfere in that way.
We could have endless arguments about the figures, but this goes beyond one budget. I believe that the machinery being used is fundamentally wrong. We are discussing a matter of principle. As we have said, the essence of local democracy is that directly elected councillors exercise their judgment, try to meet the needs of their areas and make a count at the end of the day. We are being invited to contemplate a system whereby periodically the Secretary of State imposes a form of direct rule because he disapproves of the policy of the council. I believe that there is sometimes merit in a pluralist society in having centres of power which compete. I do not believe in this kind of bully boy tactic and riding roughshod over local democracy in Scotland.
This is not a necessary exercise. It is said that it must be done to control public expenditure. In a strange way, Edinburgh has been rejected by the public purse. It has been hived off. In 1980, Edinburgh had a housng support grant of £12 million. It is now nothing, and this year there will be no rate support grant. It will be a city supported by rents, rates and charges. It will be a vision—the ultimate privatisation, in a sense, for the Adam Smith Society—if the Government have their way.
It is a crazy form of economics to say to the city of Edinburgh, "Forgo £23 million of services to get £9 million of rate support grant." That is a thieves' bargain. It is a land of make believe into which the Secretary of State has stumbled.
As I have said before—I repeat it so that the Secretary of State may understand it—my hon. Friends and I did not seek this confrontation. It has been a potential confrontation; but it is now an immediate crisis. It is a travesty for the Secretary of State to give the impression that the district council has been inflexible, unreasonable and absolutist.

Mr. Michael Forsyth: rose—

Mr. Dewar: I shall give way to the hon. Gentleman, if he wishes to challenge me, when I have developed the point.
Even those who disagree with Edinburgh district council have been aware from the beginning, and have said repeatedly in public statements, that the council's budget is not sacrosanct and that they are prepared to discuss the matter and to negotiate. The last-ditcher, the person who has not been prepared to give an inch and who has seen settlement in terms of capitulation, has been the Secretary of State, and he knows it. He has been saying, in effect, that the only basis on which to achieve a settlement is to ask this directly elected council to accept the budget of the discredited and defeated Tory group. That is inflexibility taken to the point of obstinacy in a way that we should not tolerate.

Mr. Bruce: Is the hon. Gentleman suggesting that the members of the Labour administration in Edinburgh have not proceeded with their budget, knowing that the amount was likely to be cut and that they would suffer penalties? In those circumstances, can he justify why yesterday they voted to add another £400,000 to the budget, knowing that this measure would be presented today?

Mr. Dewar: I am sure that during the debate the hon. Gentleman will perform the splits in the way that he usually does on issues such as this. The district council said that it would compromise and go to the negotiating table. The Secretary of State said that the only form of settlement was unconditional surrender. None of us can accept that.
For the Secretary of State to say that he is doing it in the names of the ratepayers, when the principal cause of discontent on the part of ratepayers has been the persistent cuts in rate support grant by the right hon. Gentleman, represents confounded brassneck on his part. He is doing it not for the ratepayers but for the Treasury. He knows that, and so does everybody else.
In the polls the right hon. Gentleman has the support of 15 per cent. of the people of Scotland. In May 1984 he led his party to unprecedented defeat in the district council elections and lost control of Edinburgh. He now purports to act as though that defeat never took place. The local authorities in Scotland have every right to fight by every legitimate means available to them. They have the backing of public opinion and it is clear what would happen if there were by-elections in Edinburgh—[Interruption.] Would the hon. Member for Edinburgh, South welcome a by-election in his constituency? He would get the result that his record deserves—summary execution—and the same would apply to the rest of the Tories.
There is a total lack of credibility about the Government's position, and they know it. I imagine that most Conservative Back Benchers—this is the achievement of the Secretary of State from the point of view of his party—have ringed April 1988 as the date that they want for the next general election, on the principle that they should put off the evil day for as long as possible.
The real problem is how to find a solution to the difficulty, and we should at least turn our minds to that. I regret that this matter has ended up in the courts. There is now an order for specific performance from the Court of Session. I understand the temptation to defy that, but it is a temptation that should be resisted. The court order should be observed. I have no doubt about that, speaking for myself. We are the parliamentary Labour party, and we believe in the democratic process. We have a right to argue and to continue to argue, but the order is there and it would not be sensible to make the central issue—apart from the point of principle—the authority of the courts. The central issue, which the Secretary of State should not escape, is what he has been doing to the services and to the local democratic processes in Scotland.

Mr. Younger: It may have been a slip of the tongue, but when the hon. Gentleman said that he was repudiating what had been done, he said that he was speaking for himself. Will he make it clear that he is speaking for his colleagues in deploring what has happened?

Mr. Dewar: I am speaking from the Dispatch Box. I make it clear that while I regret that the Secretary of State has forced us into this position, the court order should be observed. There is no dubiety about that. That is no victory for the right hon. Gentleman. There is no credit to a bully for his actions.
It is not for me to try to save the Secretary of State from his prejudices and folly. I hope that he remembers what happened in 1980–81, when Lothian was in hot water with the Scottish Office. A similar order was introduced under section 5 of the Local Government (Scotland) Act 1966 to drop £47 million from Lothian region. It was bulldozed through the House, as this one will be. However, having worked out his aggression and gone through his ritual war dance, the Secretary of State then had to face his responsibilities. He realised that he could not expect Lothian region to make such big cuts, so he settled for £30 million. He forwent £17 million of that penalty.
In the cold light of day, when he comes to look at what he is doing and the realities of the situation, the Secretary of State will realise that he has set an unreasonable target and he will have to forgo some of the penalty that he is trying to exact. He should forgo all of it. That is why we shall vote againt the measure. It is wrong in principle.
Even allowing for the fact that the Secretary of State takes a different view, he will have to go back to the negotiating table and make the concessions that, if he had made them several months ago, would have prevented this crisis. That is a fair summary of the position. The right hon. Gentleman should think long and hard, because he is doing a great deal of damage to the structure of government. His course of action is counterproductive and he should desist from it.
Behind the Secretary of State there is a great deal of private dismay and in the country there is a good deal of public dissension among Tory local government representatives. That is reflected in the polls and in recent local government by-election results in Scotland. I have no doubt that the right hon. Gentleman will win the vote tonight. I am a realist about that. However, it will be a pyrrhic victory, and the real victims will be not only many of his hon. Friends when they have to face the electorate but, more seriously, local government in Scotland and its services, which are as important in Edinburgh as in every other part of Scotland.
I know that the Secretary of State will not retreat now. However, he is committed to a harsh vendetta of which he will repent, unless he is prepared to rethink his position and take account of the realities of Edinburgh district council's position and the interests of public opinion in Edinburgh and throughout Scotland.

Rates (Edinburgh)

Lord James Douglas Hamilton: As always, I listened with the greatest interest to the hon. Member for Glasgow, Garscadden (Mr. Dewar), but his support for the Labour group on Edinburgh district council was the most lukewarm that I have ever heard from a shadow Secretary of State for Scotland.
On 22 May my right hon. Friend the Secretary of State initiated action and asked Edinburgh district council to reduce its rate. He was absolutely justified to take that action to protect ratepayers. The council was given three weeks in which to comment and, as it has failed voluntarily to reduce its rate, it has become necessary to lay this report.
I remind the hon. Member for Garscadden that the precedents were laid down by Labour Governments. Section 5(b) of Labour's Local Government (Scotland) Act 1966 provides that, if the Secretary of State is satisfied that
the expenditure of any local authority or joint board has been excessive and unreasonable, regard being had to the financial and other relevent circumstances of the area or areas concerned … the Secretary of State may reduce the element of the grant accordingly.
The principle of the Government having predominance in local authority matters was accepted by Lord Ross of Marnock, as he now is, when he was Labour Secretary of State of Scotland. On 15 December 1975 he said:
restraint on spending by local authorities in the years ahead has to be of a stringency hitherto unheard of, certainly in recent times. That is necessary in the interests both of Government and of ratepayers. We have to try to keep down the level of expenditure and the level of the rates."—[Official Report, 15 December 1975; Vol. 902, c. 1100.]
Besides, local authorities owe their existence to the Local Government (Scotland) Act 1973. In the last resort, Parliament, acting in the interests of the nation, is entitled to take the grievances of ratepayers into account.
Edinburgh's budget is 48·3 per cent. in excess of my right hon. Friend's guidelines and well above the district average of 2·7 per cent. At £114·40 per head, planned expenditure is well above the average of £62·71 for all district councils. The report will reduce the average domestic rate of £494·84 by about £39.
There is evidence of substantial overspending by Edinburgh district council. It has established a women's committee at a cost of £150,000, in the interests of the promotion of women. I suggest that my right hon. Friend the Prime Minister has done far more, by becoming the first woman Prime Minister, to advance and promote the interests of women than has that committee.
There have been leaflets, posters, car stickers and window bills at a cost of more than £42,000, which I consider to be Labour party propaganda and unnecessary. They have been paid for, not out of Labour party funds, but by Edinburgh district council. Moreover, three advertisements by Edinburgh district council in the local Evening News cost no less than £10,000. If Edinburgh district council is so confident about its policy of improving services why does it have to spend countless sums of money propagandising the electorate and advertising all over the city?

Mr. Dave Nellist: The hon. Gentleman is talking about propagandising and advertising. Would he care to reveal how many millions, if not hundreds of millions, were spent on advertising and propagandising the privatisation of British Telecom by the Government whom the hon. Gentleman supports?

Lord James Douglas-Hamilton: I should like to check, but I think the hon. Gentleman will find that the funds were provided by British Telecom. The hon. Gentleman will also find that the programme has been enormously successful in giving a great many working men a stake in the industry in which they work.
Recent accounts provided by the finance department show that Edinburgh district council intends to spend £52,000 on policy promotion.
I should like to give another example. Banners are flying outside the city chambers, the Usher hall, the Assembly rooms, the Meadowbank stadium and elsewhere
which cost more than £6,000. The flaunting of the red flag over the city chambers was unimportant in itself, but it was symbolic of something much deeper.

Mr. Hirst: Does my hon. Friend agree that many of the actions of the Edinburgh district council were taken in the face of advice by the chief executive, and that Edinburgh district council had no interest in setting a reasonable budget but was determined to have a head-on confrontation with the Government?

Lord James Douglas-Hamilton: The officials of the Edinburgh district council are very worried that their salaries may not be paid. If this kind of activity continues indefinitely. It was noticeable that the hon. Member for Garscadden did not support to the hilt the Labour party on Edinburgh district council, because he knows that it is grossly overspending.
I shall give another example of unwise spending namely, that of £10,000 having been spent on T-shirts. Most of my constituents who buy T-shirts do not think automatically of Edinburgh district council as the best source for their production. Furthermore, the 5,000 T-shirts which have been produced were to be sold for £2 each. but rumour has it hat they are not sufficiently popular and that some will have to be sold for £1·50.
Another example is the expenditure of £35,000 during the miners' strike, including £2,000 for a city arts centre exhibition. This sum had, I understand, been set aside for the families of miners. Whether or not it should have been spent for this purpose has been the subject of substantial political debate. I want to raise only one point, which was mentioned in The Scotsman on 19 November 1984 in an article on Bilston Glen:
many men make accusations about money and food parcels reaching only pickets, not the majority of strikers.

Mr. Norman Buchan: rose—

Mr. Deputy Speaker (Sir Paul Dean): Order. We cannot have two hon. Members on their feet at the same time.

Lord James Douglas-Hamilton: The allegation which I have quoted comes from The Scotsman in an article about Bilston Glen. I want to make absolutely clear what its source is, and I repeat the allegations made in the article:
many men make accusations about money and food parcels reaching only pickets, not the majority of strikers.
If the £35,000 did not reach the miners' families, but went only to pickets, there would be grounds for very


substantial complaint by the ratepayers. If money was voted for the families of miners and then was given merely to pickets, it would be entirely unjustified.

Mr. Tom Clarke: rose—

Lord James Douglas-Hamilton: I shall give one reason before I give way to the hon. Gentleman.
Picketing … became a means of coercion, a substitute, an alternative for winning minds. The moral ascendency, by which I mean that overwhelming sense of decency and fair play, which should characterise all struggles of the workers, was abandoned right from the start.
Those are not my words, but those of a distinguished socialist, Mr. Jimmy Reid.

Mr. Tom Clarke: Is the hon. Gentleman aware that the hon Member for Strathkelvin and Bearsden (Mr. Hirst) met the district council at Strathkelvin and sympathised with it, because, he said, the districts were dealt with more harshly than the regions?
Did the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) meet Edinburgh district council to hear its views on these matters? Is he willing to emulate his hon. Friend the Member for Strathkelvin and Beardsden and promise to fight for Edinburgh district council and against deprivation in Edinburgh?

Lord James Douglas-Hamilton: I have met members of the Edinburgh district council and have corresponded with them. The circumstances of Strathkelvin and Edinburgh district councils are entirely different. I agree with my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Hirst) that there is a case for fundamental reform of the rating system.
Questions have been raised by my constituents about whether the £35,000 reached those for whom it was intended. I am entitled to ask what accounts were kept, which families received money and what receipts there were. Those facts have never been put before the electorate of Edinburgh. It is in the public interest that the electors should know.

Mr. Michael Forsyth: Will my hon. Friend accept that the corruption by the district council in this matter goes further? It was not even representing the interests of its own electors. The vast majority of miners in the council's areas were working during the strike. The council was supporting a minority of the miners in its area.

Lord James Douglas-Hamilton: It would be useful to have full information about exactly where those funds went. The electorate likes to know that funds go to those for whom they are intended.
It is in character that the Labour group on Edinburgh district council should be financially supporting "the Chilean Democratico." The sum involved is £2,855, including a grant of £1,000 for a Chilean group and a charge of £300 for a public meeting. I suggest that Chilean politicking is not in the interests of my constituents.

Mr. Dewar: Will the hon. Gentleman accept that he is doing his case no good? Those of us on both sides of the argument who are interested in the serious constitutional innovation which the use of the order represents will be saddened by the trivia with which the hon. Gentleman insists on defacing the debate.

Lord James Douglas-Hamilton: As the hon. Gentleman failed to tell us whether he supports the budget of the Labour group on Edinburgh district council, I discount his intervention.
The council's accounts include £4,500 which, it is believed, went to an organisation called LOSS. The electors may take the view that it is a case of one dead loss supporting another.
There is a more fundamental reason for supporting the report than all those that I have given. When Lothian region put up rates substantially some years ago, a forest of "For sale" signs went up in shops in Princes street and George street. It is essential for Edinburgh's retail trade—the small shopkeepers and business men—to have reasonable rates. It is vital for Edinburgh's capacity to attract business.
I am particularly anxious about the financial sector—banking, accounting and insurance. Edinburgh is about to promote itself in the European Community and in the United States. The financial sector in Scotland employs about 100,000 people and is a growth sector. I believe that it will provide more jobs. That can be arranged only by a helpful attitude from both central and local government, and heavy rates show an unhelpful attitude towards business.
Similarly, tourism is a major employer. Edinburgh needs new facilities from the private sector, including a conference centre, another big hotel and a major leisure centre. That will require private investment, and the Secretary of State's actions are necessary to prevent investors from being irrevocably frightened away. The visual signs of alarm are now in abeyance because investors believe that the Secretary of State will go through with the report tonight with the necessary support.

Mr. Hirst: rose—

Lord James Douglas-Hamilton: Perhaps my hon. Friend will have a chance to speak later. I should make progress and give other hon. Members a chance to speak.
It is also necessary to build on the expertise in technology within the universities. We need more high technology companies in Edinburgh, which will have to work closely with the universities. Developments along those lines will lead to more employment in service industries. Incomers are frightened away by both high rates and a negative attitude to business. The chamber of commerce believes that Edinburgh should have better services, and the way to achieve that is to expand the economic base of the Edinburgh community so that its income is higher and the city can afford better services. The way to do that is to create more jobs in the private sector. Business men in the private sector require confidence, which is partly determined by the attitudes of local government, and greatly by those of central Government.
Finally, if the Edinburgh district council Labour group chooses to defy Parliament's decision, it will become increasingly hard within a limited period to effect the necessary economies. The Labour group must understand that it can no more overturn the democratic decisions of this House than a community council can overturn those of the Edinburgh district council. Many have sought to defy Parliament in the past, but Parliament has always won in the end.

Mr. Gavin Strang: On 14 May 1984 a report in the Edinburgh Evening News was headlined "Squalid Horror". A family had taken Edinburgh district council to court because of its living conditions, and it won its case. The sheriff said:
I can say at once, that the evidence which I heard satisfied me beyond all doubt that the conditions in which they had latterly had to live were utterly appalling … It is difficult to find words to describe the squalid horror which was to be seen when the court had a view of this house.
The debate tonight is about that squalor. The cut in the general services order will make it much more difficult to meet housing needs, as the Under-Secretary of State knows full well.
The Secretary of State made great play of what he called excessive and unreasonable expenditure. He based his judgment almost entirely on the guidelines. What about the guidelines? They were changed. The idea was that the client group approach was more objective and independent, but it is not. In the letter sent to Edinburgh district council on 22 May, appendix A states:
Up until 1981–82, guidelines were largely based on historical patterns of expenditure but since 1982–83 they have been based on the client group assessments of the relative expenditure needs of local authorities … Adjustments have been made to the client group assessments to arrive at guidelines for each year. While the adjustments have varied from year to year the aim throughout has been to provide attainable targets for authorities having regard to previous levels of expenditure.
That is the reality. If the Tory Government's 1983–84 Budget had been within the guidelines—it was not—this year's guideline for Edinburgh would have been £2 million less. When we discuss guidelines, we talk about the disastrous neglect of housing and services in Edinburgh, which has been the consequence of years of inadequate expenditure.
I am aware that others wish to contribute to the debate, so I shall eschew quoting some of the figures which I had intended to draw to the attention of the House. It is ridiculous for the Secretary of State to talk about Falkirk, Kirkcaldy, Aberdeen, Kyle and Carrick and Renfrew as comparable authorities. It is nonsense to refer to guidelines and objectivity when talking about a previous year's expenditure. It is grotesque to pay civil servants to produce such nonsense when the authorities have been specially selected to make out the Secretary of State's case.
If we are to make comparisons with other authorities, let us compare the four cities. I have with me the expenditure on general recreation for the four cities from 1976–77 to 1983–84. There are 32 figures, as there are four cities and eight years. Edinburgh was the lowest spender each year on general recreation. I remind the House that Edinburgh has to put on the Commonwealth games and that it has the Meadowbank Stadium and Commonwealth swimming pool. These major sporting facilities are for Scotland and not just Edinburgh but we are expected to spend less each year on recreation, and sometimes much less, than the other cities per head of population.
The same is true of libraries and museums. Again I have 32 figures in front of me for the years of Tory administrations. What has the abysmal expenditure in Edinburgh meant? Instead of opening new facilities—for example, providing new bowling greens and tennis courts—the old facilities have been shut. Bowling greens are very important to my constituents fifteen tennis

courts have been closed in the past 10 years and four have been privatised. Fourteen bowling greens have been closed during the 10 years of Tory control.
Edinburgh has some of the worst housing conditions in Scotland. They are disgraceful. Our services have been run down. The response of people of Edinburgh was to elect a Labour council. Labour has been the largest party in Edinburgh before, but this is the first time that the city hs had a majority Labour council.
Contrary to the Secretary of State's impression—I can remember this vividly listening to the Leader of the Labour group on local radio—the Labour party spelled out that the election of a Labour council would mean rates increases. It was made clear that extra money could be found only by forcing up the rates. Rating was an issue during the election campaign and the issue was put to the people fairly and squarely. What has been the response?

Mr. Hirst: rose—

Mr. Strang: I shall not give way, as I am aware that others want to participate in the debate. The Labour party was elected in Edinburgh on the clear mandate of reversing the appalling neglect and misery that was the legacy of Conservative administrations. The people wanted the council to start re-opening bowling greens and tennis courts instead of closing them, and to raise standards in the area.
The Government's response was to impose on the elected council of Edinburgh a budget which was defeated by the council on 5 March. The minority Tory budget was defeated by 40 votes to 22. As the Secretary of State knows, the proposed cut is identical to 0·1 of a penny. The cuts in the housing revenue budget and the associated rate cut and the cut in the general service rate would have reduced the rate from 22·7p to 15·7p which was the precise figure submitted by the Tories.

Mr. Robert Hughes: Which parties voted to defeat that district council budget?

Mr. Strang: A Scottish Nationalist party representative and an alliance representative certainly voted in that way. It is a constitutional outrage to impose that defeated Tory budget on the Edinburgh people. These cuts are massive. This measure is much more drastic than that faced by Lothian. It is true that Lothian regional council said that it would have to make massive lay-offs, and that it managed to avoid doing that. If the Government do not realise that this measure is much more severe than that, they should talk to Edinburgh district council officials. I hope that the Government will recognise the enormity of what they are trying to impose on the Edinburgh people.
The Secretary of State said, in a curious remark, that Edinburgh district council had not suggested in its submissions that a lower level of expenditure would be acceptable. The right hon. Gentleman implied that the council was not prepared to settle on a figure between the minimal Tory figure and the figure outlined in the budget. Every hon. Member knows that that is not true. The leadership of the council asked the Secretary of State for a meeting, and got it. The Government's position was in black and white—an order was laid in the House—and it was clear that they were not prepared to discuss the position with Edinburgh district council in a reasonable way. The Government were satisfied that they would force the minority Tory party's budget on the Edinburgh people.
This report is about democracy and a constitutional outrage, but it is also about the quality of life. I have had the privilege to represent an Edinburgh constituency for more than 15 years. some of the poorest parts of the city lie within my constituency, and Ministers know that. During the past five years I have seen the decline in housing and the people who once had a chance of getting a house, but now have no chance. I have seen the squalor of parts of the city. The majority of young people leave school with no prospect of getting a job. Facilities have been closed and football pitches and bowling greens have been shut. The Labour council wants people to be able to get work. It wants to give them hope and and to start to reverse the decline in housing decline.
We want to improve the houses, to open the bowling greens and to improve facilities. The Government want to force up charges, we want to let the people use the facilities. The Tories forced up prices at the Jack Kene centre in Craigmillar so high that the people could not afford to use the centre. We cut the charges, and the people are starting to use it. This is what the debate is about—an Edinburgh Labour council trying to help the people confronted by the new hard Right, the authoritarian Right-wing Tory Government. That is why, at the end of the day, the Government will lose, no matter how the House votes tonight.

Mr. Nicholas Fairbairn: I am pleased to follow two Edinburgh Members—my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) and the hon. Member for Edinburgh, East (Mr. Strang)—and to give a slightly less introverted view of the position in Edinburgh.

Mr. Nellist: They would never call the hon. and learned Gentleman "introverted" in those trousers.

Mr. Fairbairn: I do not know whether the hard Left understand what tartan is all about. I doubt that it does. If those hon. Members understood the kinship and civility that it represents, they would not sit there as a sort of shadow of eagles above the shadow Secretary of State for Scotland who did not dare state his true opinion and clung to the Dispatch Box as his only friend.
The hon. Member for Edinburgh, East started with a piece of sentimentality about a story in the Edinburgh Evening News. I notice that Opposition Members believe the reports in the Evening News, but they mocked the reports that my hon. Friend the Member for Edinburgh, West quoted from The Scotsman. They believe what they want to believe.
Similar absurd sentimentality was directed towards me when I stood for Edinburgh, Central. False stories of squalor were spread. If the hon. Member for Edinburgh, East wants to see squalor and humility, he should come to the country. He will see the services provided for those who live in the country, but they do not complain because they are not manipulated by politicians.
I have great respect for the hon. Member for Glasgow, Garscadden (Mr. Dewar), the shadow Secretary of State for Scotland. Tonight he was not the shadow Secretary of State for Scotland; he was the shadow of the shadow Secretary of State for Scotland. Only a lawyer could have given a so pellucidly false defence of a rotten case in which

he clearly did not believe. If it had not been for the fact that the clients were behind him warning him that he had better pretend that he was in favour of the Edinburgh mafia, he would not have done so.
I should like to ask the hon. Gentleman what doctrine of law or morals of politics it is when he says, "Speaking for myself." I am surprised that he did not get off the Front Bench and go behind himself to speak for himself, then in front of himself and say to himself, "Me and the Dispatch Box, believing in one another, have a private opinion which we believe is acceptable to us and our conscience but which we must not share with the shadow Cabinet or the rest of the party behind me." I have never heard of a doctrine by which he can say that he believes in law and order and say, "Speaking from the Dispatch Box, and the Box and I, both being made of wood, understand one another." The leader of the Edinburgh council is also called Wood. "We are in league. We understand one another, and I shall not extend my responsibilities to my colleagues because I know that they would not share them." I regard that as disgraceful. I am amazed that it came from the hon. Member for Garscadden.

Mr. Dewar: I am grateful to the hon. and learned Gentleman. I use the word "learned" only as a courtesy of the House. May I make it clear to him and to any other hon. Gentleman who wishes to listen, and I hope to put it beyond misrepresentation, that we believe that the court order must be observed.

Mr. Fairbairn: Who is "we"?

Mr. Dewar: The Labour party believes that the court order must be observed. It should not be ignored. I want to make that clear. That is part of the demomcratic process in which we all operate. A court order exists and that is something that we and everyone must take into account. That statement is unambiguous and made without any caveat. In two or three years we shall have a different Government and different laws, but I am sure that he would want to obey court orders, as we obey them at the moment.

Mr. Fairbairn: If, as is unlikely, in two or three years it were to be a Government of the hon. Gentleman's persuasion, we should not seek to say that we obey the law only so far as it suits us, and call only for the Dispatch Box as our ally. If the hon. Member for Garscadden is not willing to allow me the courtesy of the title to which I am entitled, and does so only out of courtesy, that demonstrates the pellucid fallacy of his arguments and judgment.
The rating and voting system which Opposition Members care to call democracy have always been of great benefit to Socialists. It has always amazed me that the English gentlemen here tonight have never seen the advantage that can so easily be taken of the system.
Of the electorate who provide local funds, the industrial third has no vote and the commercial third has no vote. Of the domestic sector which has a vote, more than 50 per cent. benefit from increased expenditure without having to contribute to it. It is an absolute mug's paradise. If I had been a Socialist, I would have taken advantage of it long ago. I would have been spending through the roof, because votes can be bought. One can have any number of bowling greens and one can besmirch a city with notices saying,


"We are providing services with jobs." [Interruption.] If hon. Members would listen rather than shout, they might learn something.
The hon. Member for Edinburgh, East raised a very important point. Edinburgh is about to have to service the Commonwealth games. I am informed, from the most impartial sources of all persuasions, that those who would have been contributing to the Edinburgh Commonwealth games are ceasing to do so because of the policies of Edinburgh district council. [HON. MEMBERS: "Name them."] People can be given free bowling greens in Craigmillar; but what is provided in an equivalent part of Edinburgh, in Pilton? That is real prosperity. Instead of being run by a local authority as a housing encampment, the houses in Pilton have been privatised and sold off, and jobs and services are coming from those sales.
Not only on the present inequalities of the voting system does extravagance pay. If I had been a good Socialist I would have noticed that extravagance has paid hand over fist. The Secretary of State has announced tonight that he will not even ask Edinburgh district council to come down to its guideline. He will not even ask it to come within £1 million of its guideline. As a result of its extravagance last year, the guideline of Edinburgh district council is infinitely higher that it was. The Secretary of State rightly said that it would be impossible to make the council come reasonably within its guideline, so he will meet the council half way. But the guideline of responsible authorities, such as Perth and Kinross district council, is kept miles below where it should be. So Edinburgh district council, in this great battle, will discover, as the Secretary of State has just announced, that it will be allowed to spend miles above its guideline and to benefit from it for the second year running.
I understand that Labour Members know how to work the system. If I were with Mr. Wood and his little clique of Marxists, I would do the same.

Mr. David Lambie: What about the legal aid system?

Mr. Fairbairn: If the hon. Member for Cunninghame. South (Mr. Lambie) wishes to question legal aid, he can do so; but let him remember that legal aid in Scotland did not start for criminal matters until I had been at the Bar for five years and I had defended without fee 17 people who were in line for the death penalty. If the hon. Gentleman wishes to say that people at the Bar are on the gravy train, let him say it to the shadow Secretary of State, the hon. Member for Garscadden, who is a solicitor. I hope that the hon. Gentleman will not raise that matter again.
Edinburgh's income comes from its commerce and from a few of its citizens, and that commerce and those citizens are being driven out. Edinburgh is destroying the goose that lays the golden eggs. It may have a few more bowling green attendants and people who paint banners and hang them up, and, when they are torn down, hang them up again; it may have people who work in the legal department in order to get round the fact that they do not have planning permission to besmirch the city; but it is defying by extravagance, because the people who are doing it believe it to be to their electoral advantage. They are spending other people's money to promote their hideous doctrine. The Labour Government introduced the system, but, as the Secretary of State said tonight, one cannot feed from the ratepayers.

Mr. Ron Brown: Being a member of the Leith Labour party and not the Edinburgh Labour party, I may be allowed to say that this is a timely debate and sums up many things happening in this country. Democratic, basic rights are under attack: that is what this debate is all about. The Secretary of State is, in effect, a governor-general. He is imposing the diktat of Whitehall, the diktat of a discredited regime, and whatever he says will not wash in Scotland, not even in the Tory press. That is an indication of what the electorate in Scotland thinks of the Conservative party.
Despite all the comments in the past about the Tories being concerned to see less interference in local affairs, less government, more freedom, we see now that the mask has dropped. Not only has this Government double standards, they are two-faced, because in reality they represent a police state. One has only to look at the catalogue of laws they have brought in since they came to office in 1979. It is sheer hypocrisy for Conservative Members to talk about cutting public expenditure. During the Government's term of office, they have cut over £1 billion from the rate support grant in Scotland. That is not money saved, because it has been transferred elsewhere. It has been invested, so called, in Trident and in a new breed of nuclear weapons. That is hypocrisy, and I use that term advisedly.
The Government have priorities, but they are not interested in the people of England or Scotland or wherever. One recalls the old reactionary slogan of guns before butter, but today the slogan is missiles before life, before health. [Interruption.] We hear a lot of criticism in this debate of Labour councils, but we know from looking at the record, that those councils do not throw money around: they do not have it to throw around. Given a chance, they invest in their communities, they invest in people, because they are the greatest asset and resource we have. Some of my colleagues are in Edinburgh, and they are defending jobs, services, and living standards. Some Conservative Members seem to think that that is a crime nowadays.
All local authorities have mandates, which they must follow. To do otherwise would mean that they were doing the Tory party's dirty work, and our colleagues in Edinburgh certainly do not intend to do that. In some newspapers, including The Sun, the Daily Express and the Daily Mail, my colleagues in Edinburgh are called doctrinaire extremists. If that is the case, let us have more of it. I prefer to call it sticking to principles, which is important in politics nowadays.
In case Conservative Members have forgotten it, the Labour party won last year's local elections with a record swing—[Interruption.)

Mr. Michael Forsyth: On a point of order, Mr. Deputy Speaker. I apologise for interrupting the thread of the hon. Gentleman's argument, but is it in order for him to use the Chamber of the House of Commons as a flyposting board to display his propaganda? Should he not be asked to remove that banner?

Mr. Deputy Speaker: As a mere Englishman, I have not seen or heard anything that is out of order.

Mr. Brown: Thank you, Mr. Deputy Speaker. Before I was so rudely interrupted, I was saying that the Labour


party won last year's election with a record swing in support. Why did that happen? Was it simply a fluke that Labour took control of Edinburgh? Of course, we know the reason. Edinburgh, like Britain, is in a mess because of the Tory administration. The so-called Athens of the north had become the slum of the north, and the Labour party had to move in and deal with the problems.
To follow what my hon. Friend the Member for Edinburgh, East (Mr. Strang) said, may I remind the House that the Labour administration in Edinburgh inherited a housing waiting list of 13,000 families, and a backlog of sub-standard local authority housing? About 6,000 houses were without baths. I am sure that some Conservatives Members have several baths in their houses. Thanks to Tory maladministration, Edinburgh had litter-strewn streets, and libraries without books—not even the Dandy or the Beano. Recreation facilities were closed.
All that happened in a city which talks about a festival—

Mrs. Anna McCurley: On a point of order, Mr. Deputy Speaker.

Mr. Brown: —for the middle classes and the rich. It talks about hosting the Commonwealth games. It talks about many things—[Interruption.]

Mrs. McCurley: On a point of order, Mr. Deputy Speaker. Is it in order to decorate the Opposition Benches with—[Interruption.] I see that the banner has just come down, so I withdraw my point of order.

Mr. Deputy Speaker: I dealt with that point of order earlier. May I remind the House that this is a short debate, and that the Minister hopes to reply at 11.20 pm.

Mr. Brown: Much more could be said about the Tory record in Edinburgh. Indeed, much more should be said about it. We had criminals operating in Edinburgh for a long time, not doing the jobs that they were elected to do, but working contrary to the interests of Edinburgh's citizens. We hear about the two nations of the Conservative party. In Edinburgh, we have two cities. Visitors to Edinburgh notice better than anyone that, in the new town, there are fine new buildings. They see Bute house, where the Secretary of State resides in all his finery and with his 10 baths. If one goes there, one is very impressed, that is, until one goes to the new houses.
To give the Secretary of State his due, he does occasionally come out of his fantastic mansion. He came out of his tied cottage, for example, a year or so ago when he went to West Pilton to visit some friends who had acquired, thanks to the Tory council, a number of houses which had been modernised. Of course, the houses were bought at a knock-down price. The houses were being sold off to the private sector for a record profit. The right hon. Gentleman quite naturally goes to see his friends, the building fraternity. After all, they are very good at financing the Tory party. They are very generous at putting money into the coffers. One company alone in Edinburgh, Smart the builders, in one year gave £30,000 to the Tory party, so quite naturally the Tories look after their friends.
Talking about kick-backs, we can observe this on the Government Benches, because the Secretary of State and the Tory party know all about kick-backs.

Mr. Tom Clarke: Does my hon. Friend recall that when the Select Committee on Scottish Affairs visited Edinburgh, we were discussing the serious problem of dampness? Does he recall the appalling conditions that we found? Does he recall that the then Conservative convenor of housing, Councillor Drummond-Young, appealed for more capital to be invested in Edinburgh? Is not one of the most appalling features of the order the fact that that capital is going to be reduced?

Mr. Brown: My hon. Friend makes a valid point. The former councillor to whom he refers, Councillor Drummond-Young, was obviously very concerned about the situation. He was an extreme Right-winger. I do not know whether he is still around these days. He lost his seat, quite naturally, in the last local elections.
I think that that sums up the role of the Tory party. Even within that Tory group, there was concern about the indifference of its own Government. Undoubtedly, Councillor Drummond-Young made that point to the Select Committee. I am sure that this could be repeated throughout the country. No doubt we would hear the same in Liverpool.

Mr. Robert Parry: In the last session of Parliament, I represented Liverpool, Scotland. I fully support the fight which my hon. Friend is making on behalf of the people of Edinburgh. I can assure him, on behalf of my hon. Friend the Member for Liverpool, Broadgreen (Mr. Fields) of the support of the Liverpool people. I note that the Secretary of State is shaking his hands, but he is the monkey grinder for Mrs. Thatcher, like the Secretary of State for the Environment—[Interruption.]

Mr. Deputy Speaker: Order. Interventions must be brief.

Mr. Parry: It appears that in the battle in Edinburgh in Scotland and in Liverpool in England, the cold hand of the Prime Minister is behind the Secretary of State for Scotland and the Secretary of State for the Environment.

Mr. Brown: I thank my hon. Friend for his intervention. What he says can be summed up in this way. What the Tories are saying is, take it or leave it. That is the message being given from the Dispatch Box by the Secretary of State, who knows full well that his political role is to support big business. It is to redistribute wealth from the working class to the bosses. That is his job. He does it in a certain way, and he tries a little flannel, but he does not con many people. He may suggest that in better times it is possible to be more generous, and it is true that in good times in the past a few crumbs were given to the working class. Now they are being taken back.
Why is this action being taken against Edinburgh? Is it because the Secretary of State is vicious and vindictive? [Interruption.] The real reason is that there is an almighty crisis in the economy and the Tories want to take back all the gains that the working class has won since the war. They want to reduce real wages, attack the welfare state and reduce the social wage. That is why they are having a go at Edinburgh, which is sticking its neck out and is in the front line. The Government feel that they must challenge that position.
Some say that what is happening is the result of monetarism. Let us be clear that that is not a new word. Monetarism was tried years ago, especially in the 1920s,


when, like today, the working class was told that the nation had to save money, and there were calls for a return to the gold standard. That resulted in attacks on jobs and living standards, and the working class suffered.
Despite the setback of 1926, when the working class was let down badly because of weak-kneed individuals—the TUC of that period—in the local authorities there were individuals such as George Lansbury in Poplar who led the way forward. I say in all modesty—[Interruption.]—that Edinburgh typifies the Poplar spirit, the spirit of Lansbury. If we are to learn from history, we must look back to what was achieved by the individuals of the time, because the same can be achieved now.
Conservative Members may smile at what I am saying, but in Edinburgh the members of the Labour group are still concerned with fighting injustice, although the Secretary of State is bound to disagree with anything that we say on behalf of the working class. He and his hon. Friends will continue to jump up and down and assert, "We represent parliamentary democracy," and pontificate on what that means. When Conservative Members speak about democracy, they do so as a front for the capitalist system, a system that is unfair, inefficient, corrupt and dangerous.
It is unfair because wealth is concentrated into fewer hands; it is inefficient because it creates massive unemployment and results in foodstuffs, like industries, being destroyed; it is corrupt because it fosters the black economy and harbours, for example, the Vestey family; and that it is dangerous was demonstrated by the conflict in the south Atlantic.
For all those reasons, the capitalist system is condemned. My advice to my colleagues in the Public Gallery—[Interruption.]—is that they should stick to their guns. It is not simply a question—[Interruption]—of breaking the law. Laws can be made and they can be unmade. Laws made by the Conservatives are not designed to improve society but to destroy the decent things in life. If Tory Members speak to working class people they will have that explained, though I am beginning to wonder whether they would even want to speak to Conservative Members.
Why not bend the knee, and let things develop? Why not concede certain things? That would not be just a gesture, of the sort that many in this place are used to. It would mean that services and jobs would be decimated. One could not consider what would happen as a result. If we described what would happen, we would be describing a real horror story. Somebody could make a video of it, and sell it off to ITV.
We must emphasise that the order does not cover housing, although it has been mentioned, because housing policy has been decided in the other place.

Mr. Martin Flannery: rose—

Mr. Deputy Speaker: Is the hon. Member for Edinburgh Leith (Mr. Brown) giving way?

Mr. Brown: Yes, I am.

Mr. Flannery: Does my hon. Friend agree that the struggles against the Tory party by Labour Members, cities such as Sheffield, Edinburgh and Liverpool and boroughs such as Lambeth, have resulted, whether the Tories like it or not, in the latest Gallup poll? It shows that the Tories are third at 28 per cent., with the alliance taking

32 per cent. of the poll, and the Labour party 38 per cent. The Tories will read this in the Daily Telegraph tomorrow. and realise where their policies are taking them

Mr. Brown: I thank my hon. Friend for his important point.
It was interesting that earlier on, the hon. Member for Edinburgh, West (Lord James Douglas-Harnilton) attacked the Labour group for flying the red flag. I assume that he would prefer the stars and stripes, or a white flag, but for us, the red flag is a nice colour and quite appropriate. He thinks that the members of the Labour group in Edinburgh are extremists, but far from it. Even the figures produced by the Government show that Edinburgh is spending £9·1; per head of population, compared with the Scottish average of £11·04.
If the rate support grant of 1974 were paid today, Edinburgh would be £2 million better off, but because of the repeated cuts, Edinburgh has suffered.

Mr. A. J. Beith: On a point of order, Mr. Deputy Speaker. I appeal to you to have regard to the provisions of standing order No. 3(1)(b), bearing in mind that the confrontation that is going on is likely to have the effect of excluding my hon. Friend the Member for Gordon (Mr. Bruce) from expressing the views of 25 per cent. of the people of Scotland, who have as much claim as anybody else to take advantage of the debate. Therefore, I ask you to rule that, because of the importance of the subject matter, the time for debate has not been adequate, and under the provisions of the standing order, you will allow the business to stand over until the next day's sitting.

Mr. Deputy Speaker: Order. I realise that a number of hon. Members on both sides of the House will not have the opportunity to speak in the debate, but I am not prepared to exercise my discretion in that regard, and I intend to put the question at 11·30.

Mr. Dalyell: Further to the point of order, Mr Deputy Speaker. Is the hon. Member for Gordon (Mr. Bruce) to take precedence over those of us who represent some of the district under discussion?

Mr. Brown: It has been suggested that Edinburgh councillors want confrontation. It is the Government who want confrontation. They are on a loser if they think that electors do not back the councillors. If the Secretary of State knows anything about Edinburgh—when he occasionally goes there he no doubt reads the Edinburgh Evening News—he knows that the Evening News is not a revolutionary newspaper and that it carried a poll—

It being half past Eleven o'clock MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business).

The House divided: Ayes 229, Noes 137.

Division No. 282]
[11.30 pm


AYES


Aitken, Jonathan
Beaumont-Dark, Anthony


Amess, David
Bellingham, Henry


Ancram, Michael
Bevan, David Gilroy


Arnold, Tom
Biffen, Rt Hon John


Ashby, David
Blackburn, John


Aspinwall, Jack
Bonsor, Sir Nicholas


Atkins, Robert (South Ribble)
Boscawen, Hon Robert


Baker, Rt Hon K. (Mole Vall'y)
Bottomley, Peter


Baker, Nicholas (N Dorset)
Bottomley, Mrs Virginia


Baldry, Tony
Bowden, A. (Brighton K'to'n)


Batiste, Spencer
Bowden, Gerald (Dulwich)






Boyson, Dr Rhodes
Hickmet, Richard


Braine, Rt Hon Sir Bernard
Higgins, Rt Hon Terence L.


Brandon-Bravo, Martin
Hind, Kenneth


Bright, Graham
Hirst, Michael


Brinton, Tim
Hogg, Hon Douglas (Gr'th'm)


Brooke, Hon Peter
Holland, Sir Philip (Gedling)


Brown, M. (Brigg &amp; Cl'thpes)
Holt, Richard


Browne, John
Howard, Michael


Bruinvels, Peter
Howarth, Alan (Stratf'd-on-A)


Buck, Sir Antony
Howarth, Gerald (Cannock)


Budgen, Nick
Howell, Rt Hon D. (G'ldford)


Burt, Alistair
Howell, Ralph (N Norfolk)


Butterfill, John
Hubbard-Miles, Peter


Carlisle, John (N Luton)
Hunt, David (Wirral)


Carttiss, Michael
Hunt, John (Ravensbourne)


Cash, William
Hunter, Andrew


Channon, Rt Hon Paul
Jessel, Toby


Chapman, Sydney
Johnson Smith, Sir Geoffrey


Chope, Christopher
Jones, Gwilym (Cardiff N)


Clark, Sir W. (Croydon S)
Jones, Robert (W Herts)


Colvin, Michael
Joseph, Rt Hon Sir Keith


Coombs, Simon
Key, Robert


Cope, John
King, Roger (B'ham N'field)


Corrie, John
King, Rt Hon Tom


Couchman, James
Knight, Greg (Derby N)


Cranborne, Viscount
Knight, Dame Jill (Edgbaston)


Crouch, David
Knowles, Michael


Currie, Mrs Edwina
Lamont, Norman


Dicks, Terry
Lang, Ian


Dorrell, Stephen
Latham, Michael


Douglas-Hamilton, Lord J.
Lawler, Geoffrey


Dover, Den
Leigh, Edward (Gainsbor'gh)


Dunn, Robert
Lewis, Sir Kenneth (Stamf'd)


Durant, Tony
Lightbown, David


Dykes, Hugh
Lilley, Peter


Eggar, Tim
Lloyd, Ian (Havant)


Emery, Sir Peter
Lloyd, Peter, (Fareham)


Evennett, David
Luce, Richard


Fairbairn, Nicholas
Lyell, Nicholas


Fallon, Michael
McCrindle, Robert


Farr, Sir John
McCurley, Mrs Anna


Favell, Anthony
Macfarlane, Neil


Fenner, Mrs Peggy
MacKay, Andrew (Berkshire)


Fletcher, Alexander
MacKay, John (Argyll &amp; Bute)


Forman, Nigel
Maclean, David John


Forsyth, Michael (Stirling)
McNair-Wilson, P. (New F'st)


Forth, Eric
McQuarrie, Albert


Fowler, Rt Hon Norman
Madel, David


Fox, Marcus
Major, John


Franks, Cecil
Malins, Humfrey


Fraser, Peter (Angus East)
Maples, John


Freeman, Roger
Mates, Michael


Fry, Peter
Mather, Carol


Gale, Roger
Maxwell-Hyslop, Robin


Galley, Roy
Mayhew, Sir Patrick


Gardiner, George (Reigate)
Mellor, David


Gardner, Sir Edward (Fylde)
Merchant, Piers


Garel-Jones, Tristan
Meyer, Sir Anthony


Gow, Ian
Miller, Hal (B'grove)


Grant, Sir Anthony
Mills, Iain (Meriden)


Gregory, Conal
Mills, Sir Peter (West Devon)


Griffiths, Peter (Portsm'th N)
Moate, Roger


Grist, Ian
Monro, Sir Hector


Ground, Patrick
Montgomery, Sir Fergus


Grylls, Michael
Moore, John


Gummer, John Selwyn
Morris, M. (N'hampton, S)


Hamilton, Neil (Tatton)
Morrison, Hon C. (Devizes)


Hampson, Dr Keith
Moynihan, Hon C.


Hanley, Jeremy
Murphy, Christopher


Hannam, John
Neale, Gerrard


Hargreaves, Kenneth
Needham, Richard


Harris, David
Nelson, Anthony


Haselhurst, Alan
Neubert, Michael


Havers, Rt Hon Sir Michael
Newton, Tony


Hawkins, Sir Paul (SW N'folk)
Nicholls, Patrick


Hawksley, Warren
Normanton, Tom


Hayes, J.
Norris, Steven


Hayward, Robert
Oppenheim, Phillip


Heathcoat-Amory, David
Osborn, Sir John


Henderson, Barry
Ottaway, Richard





Page, Sir John (Harrow W)
Speed, Keith


Page, Richard (Herts SW)
Squire, Robin


Parkinson, Rt Hon Cecil
Stern, Michael


Parris, Matthew
Stevens, Lewis (Nuneaton)


Patten, Christopher (Bath)
Stewart, Allan (Eastwood)


Pawsey, James
Stewart, Andrew (Sherwood)


Peacock, Mrs Elizabeth
Stokes, John


Pollock, Alexander
Terlezki, Stefan


Portillo, Michael
Thompson, Donald (Calder V)


Powell, William (Corby)
Thompson, Patrick (N'ich N)


Prentice, Rt Hon Reg
Thurnham, Peter


Price, Sir David
Vaughan, Sir Gerard


Proctor, K. Harvey
Viggers, Peter


Raffan, Keith
Walden, George


Rathbone, Tim
Walker, Bill (Tside N)


Renton, Tim
Wardle, C. (Bexhill)


Rhodes James, Robert
Warren, Kenneth


Rhys Williams, Sir Brandon
Wells, Sir John (Maidstone)


Ridley, Rt Hon Nicholas
Wiggin, Jerry


Ridsdale, Sir Julian
Wood, Timothy


Rifkind, Malcolm
Younger, Rt Hon George


Rost, Peter



Sainsbury, Hon Timothy
Tellers for the Ayes:


Shaw, Giles (Pudsey)
Mr. Archie Hamilton and


Silvester, Fred
Mr. Mark Lennox-Boyd.


Smith, Sir Dudley (Warwick)





NOES


Atkinson, N. (Tottenham)
Fisher, Mark


Banks, Tony (Newham NW)
Flannery, Martin


Barnett, Guy
Forrester, John


Barron, Kevin
Foster, Derek


Beckett, Mrs Margaret
Fraser, J. (Norwood)


Beggs, Roy
Garrett, W. E.


Bell, Stuart
Gilbert, Rt Hon Dr John


Benn, Tony
Godman, Dr Norman


Bennett, A. (Dent'n &amp; Red'sh)
Hardy, Peter


Bermingham, Gerald
Harman, Ms Harriet


Bidwell, Sydney
Harrison, Rt Hon Walter


Brown, Gordon (D'f'mline E)
Hattersley, Rt Hon Roy


Brown, Hugh D. (Provan)
Haynes, Frank


Brown, N. (N'c'tle-u-Tyne E)
Heffer, Eric S.


Brown, R. (N'c'tle-u-Tyne N)
Hogg, N. (C'nauld &amp; Kilsyth)


Brown, Ron (E'burgh, Leith)
Holland, Stuart (Vauxhall)


Buchan, Norman
Home Robertson, John


Caborn, Richard
Hoyle, Douglas


Callaghan, Jim (Heyw'd &amp; M)
Hughes, Dr. Mark (Durham)


Campbell, Ian
Hughes, Robert (Aberdeen N)


Campbell-Savours, Dale
Hughes, Roy (Newport East)


Clark, Dr David (S Shields)
Hughes, Sean (Knowsley S)


Clarke, Thomas
Hume, John


Clwyd, Mrs Ann
John, Brynmor


Cocks, Rt Hon M. (Bristol S.)
Jones, Barry (Alyn &amp; Deeside)


Cohen, Harry
Kaufman, Rt Hon Gerald


Coleman, Donald
Kilfedder, James A.


Conlan, Bernard
Kilroy-Silk, Robert


Cook, Frank (Stockton North)
Lambie, David


Cook, Robin F. (Livingston)
Lamond, James


Corbett, Robin
Leadbitter, Ted


Corbyn, Jeremy
Leighton, Ronald


Cowans, Harry
Lewis, Terence (Worsley)


Cox, Thomas (Tooting)
Litherland, Robert


Craigen, J. M.
Lloyd, Tony (Stretford)


Crowther, Stan
Loyden, Edward


Cunningham, Dr John
McCartney, Hugh


Dalyell, Tam
McDonald, Dr Oonagh


Davis, Terry (B'ham, H'ge H'l)
McKay, Allen (Penistone)


Deakins, Eric
McKelvey, William


Dewar, Donald
MacKenzie, Rt Hon Gregor


Dixon, Donald
McTaggart, Robert


Dobson, Frank
McWilliam, John


Dormand, Jack
Madden, Max


Douglas, Dick
Marshall, David (Shettleston)


Dubs, Alfred
Martin, Michael


Duffy, A. E. P.
Maynard, Miss Joan


Eadie, Alex
Meacher, Michael


Eastham, Ken
Millan, Rt Hon Bruce


Ewing, Harry
Miller, Dr M. S. (E Kilbride)


Fatchett, Derek
Nellist, David


Fields, T. (L'pool Broad Gn)
Nicholson, J.






O'Brien, William
Silkin, Rt Hon J.


O'Neill, Martin
Skinner, Dennis


Parry, Robert
Smith, Rt Hon J. (M'kl'ds E)


Pavitt, Laurie
Snape, Peter


Pike, Peter
Soley, Clive


Powell, Raymond (Ogmore)
Stewart, Rt Hon D. (W Isles)


Prescott, John
Stott, Roger


Radice, Giles
Strang, Gavin


Randall, Stuart
Taylor, Rt Hon John David


Redmond, M.
Wareing, Robert


Richardson, Ms Jo
Wilson, Gordon


Robertson, George
Winnick, David


Robinson, G. (Coventry NW)
Woodall, Alec


Rogers, Allan
Young, David (Bolton SE)


Rowlands, Ted



Sheerman, Barry
Tellers for the Noes:


Sheldon, Rt Hon R.
Mr. James Hamilton and


Shore, Rt Hon Peter
Mr. Lawrence Cunliffe.

Question accordingly agreed to.

Resolved
That the Rate Reduction (City of Edinburgh District) 1985–86 Report, which was laid before this House on 3rd July, be approved.

Rate Rebates (Scotland)

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): I beg to move,
That the Revaluation Rate Rebates (Scotland) Order 1985, dated 9 July 1985, a copy of which was laid before this House on 10 July, be approved.

Mr. Malcolm Bruce: On a point of order, Mr. Deputy Speaker. In the debate that has just ended, the arguments that could be advanced by the parties representing 25 per cent. of the electorate in Scotland were not heard. The mess that Edinburgh faces is the direct result of the confrontation between the Conservative and Labour parties. We have been denied the right to contribute to this debate. In those circumstances, although we oppose the actions of the Government, it was impossible for us to vote when we had no opportunity to explain our views. Is this a democractic Chamber, or is it not?

Mr. Deputy Speaker (Sir Paul Dean): Order. I understand the hon. Gentleman's point. Equally, I understand that a number of hon. Members on both sides of the House, including one Minister, were disappointed in the last debate. The Chair always does its best in the limited time available.

Mr. David Steel: On a point of order, Mr. Deputy Speaker. [Interruption.]

Mr. Deputy Speaker: Order. Of course I will take the right hon. Gentleman's point of order, but I hope that he realises that time taken up by points of order now is taking valuable time out of this debate, which can last only for an hour and a half.

Mr. Steel: On a point of order, Mr. Deputy Speaker. I hope that this will be helpful to the Chair—[Interruption.]

Mr. Deputy Speaker: Order. I want to hear this point of order.

Mr. Steel: Under Standing Order No. 3(1)(b), where the occupant of the Chair is of the opinion that
because of the importance of the subject matter of the motion, the time for debate has not been adequate, he shall, instead of putting the question as aforesaid, interrupt the business, and the debate shall stand adjourned till the next sitting (other than a Friday).
May I suggest that when the Front Benches have taken so much time, when an hon. and learned Member from well outside Edinburgh has taken so much time and when one Edinburgh Member has spoken for 25 minutes, the only discipline available to the occupant of the Chair is the use of that Standing Order to make it clear that hon. Members who try to occupy the time of the House in that way will not get away with it.

Mr. Deputy Speaker: I have dealt with the issue raised in that point of order; I am rot sure whether the right hon. Gentleman was in the Chamber at the time. I exercised my discretion. That is the duty of the Chair on such occasions.

Mr. Robert Maclennan: Further to the point of order, Mr. Deputy Speaker. In your response to my hon. Friend the Member for Gordon (Mr. Bruce), you referred to the disappointment of a number of


hon. Members in all parts of the House, but I hope that you were not suggesting that the disappointment felt by Back-Bench Labour or Conservative Members could be compared with the frustration of two political parties that represent a quarter of the electorate—a disappointment which is compounded by the fact that in his opening speech the Secretary of State specifically invited contributions from my hon. Friend the Member for Gordon and from myself.
The Government side took 52 minutes of the debate, the Labour party took 58 minutes and they excluded third party opinion. The procedures of the House were grossly abused and it was noted that there were no suggestions from the Chair about the desirability of short speeches. In the latter part of the debate, remarks strayed very far from order.

Mr. Deputy Speaker: The hon. Gentleman has made his point. I hope that we can now get on.

Mr. Tam Dalyell: Further to that point of order, Mr. Deputy Speaker. If those roles are to be invoked, do not matters of geography become relevant? Why does an hon. Member from 300 miles to the north think that he can take precedence over some of us who represent the area concerned? I make no complaint about not being called, but let it be recorded that if there is to be precedence, hon. Members who represent the area should take precedence over those from a long way away.

Mr. Deputy Speaker: I think that the House now realises very well that the Chair is sometimes in the middle of the crossfire.

Mr. Ancram: The order is the last link in the statutory chain needed to bring into effect the relief for ratepayers which my right hon. Friend announced to the House on 14 May. The powers enabling the order to be made are prescribed in the Rating (Revaluation Rebates) (Scotland) Act 1985 which was given a Second Reading on 3 June. After a speedy passage—I am glad to record our thanks for the co-operation given by the Opposition—the Act received Royal Assent on 26 June. It comes into force on 26 August, which is also the date of coming into operation of this order.
The order is also the latest measure by the Government to mitigate the most severe effects of the 1985 revaluation. As the House knows, we increased the domestic element of rate support grant, first, on the basis of early estimates of the new values, when it became apparent that the domestic sector as a whole would have to bear a substantially greater share of the rate burden and, secondly, to the unprecedented level of £102 million after local authorities had determined their rates and it became clear that an intolerable burden on the domestic sector was being imposed by the effects of revaluation, together with high spending plans. I am bound to say there have been some irresponsibly high spending plans, in one case so wildly irresponsible that my right hon. Friend has been obliged to take the selective action approved by the House tonight.
Relief for the domestic sector and adjustment of the effects of revaluation through reduction of industrial derating from 50 to 40 per cent. were possible by using powers already available to us. When later information

became available for individual ratepayers of the combined effects of revaluation and high rates, it became clear that something more needed to be done, in particular for commercial ratepayers for whom our earlier average figures had indicated that the effect of revaluation was broadly neutral. Once the rolls were published, we learnt that there were many individual cases of horrifying rate increases. They seriously jeopardised the ability of many commercial ratepayers to continue in business. The powers that the Government already had did not enable us to meet the circumstances, hence the need to seek the powers which are now enacted in the Rating (Revaluation Rebates) (Scotland) Act 1985.
The House may find it helpful if I briefly remind it of those powers. The Act enables my right hon. Friend to provide by order for rating authorities to grant rebate of rates on property where the 1985–86 rateable value is more than three times the 1984–85 rateable value. Property valued by formula or by order, property occupied by the Crown or local authorities, and industrial and freight transport subjects benefiting from industrial derating are all excluded. An order may be made for the current financial year or any year thereafter. The order before the House exercises those powers for 1985–86.
Articles 1 and 2 are the normal provisions dealing with citation and commencement, and with interpretation.
Article 3 simply provides for rating authorities to grant rebates to lands and heritages which qualify under the Act.
Article 4 provides for the amount of rebate to be calculated by comparing old and new values for the same property. Rates payable after rebate will be as if the new rateable value were no more than three times the old value.
There is also provision that, in calculating rebate, no account should be taken of any reduction in the amount of rates payable when any valuation appeal is pending. Until an appeal is settled, a ratepayer is required to pay only 90 per cent. of his rates, or such lesser amount as the rating authority may agree. The effect of the provision in article 4(2) is that the 90 per cent. rule is not taken into account when determining a rebate. It might be thought that it is unnecessary to give a ratepayer the benefit of both a rebate and the 90 per cent. concession on the amount payable while a valuation appeal is pending. But it is important that the new rebate scheme does not encourage ratepayers from appealing if they think that the valuations are wrong.
My right hon. Friend and I have made it clear that the rebate scheme should not be regarded in any way as a substitute for going ahead in the normal way with an appeal where the ratepayer disagrees with the assessor's valuation. We therefore think it important to retain intact and separate the "upfront" incentive of 10 per cent. off the amount payable, without having it confused by being subsumed in the revaluation rebate at this stage. Obviously, once the appeal is determined one way or the other, the result will be the basis of the final entitlement to revaluation rebate, if any. Thus, someone who is in due course successful in his appeal, to the extent that his revised valuation would not have entitled him to as much revaluation rebate, will have his account adjusted, in accordance with article 6.
Article 4(3) is a provision restricting the rebate for any one property to £10,000. The intention is to focus relief on the small ratepayer and especially smaller businesses. We recognise that there is some rough justice in this provision. There is an obvious disadvantage for the large one-shop business as against the large business which
operates many small shops. But resolving anomalies of that kind would seriously complicate the scheme and there is no guarantee that any solution would not itself produce further anomalies. A restriction of £ 10,000 for each rebate is considered the simplest method of targeting relief on small businesses.
Article 5 first places a duty on rating authorities to ascertain those lands and heritages which qualify for rebate and to grant the appropriate rebate by 16 September 1985. This provision is based on the advice we received from officials of the Convention of Scottish Local Authorities and of rating authorities and assessors whom we consulted about the practical application of the scheme. Briefly, they advised that the scheme would operate more smoothly if rating authorities determined from their records who was entitled to rebates and calculated and awarded the appropriate amount. Modern systems make this much easier than obliging ratepayers who think they may be entitled to rebate to lodge a claim. We are grateful for that advice, which we were glad to accept, and for which other sound advice which those bodies gave which has been taken into account in the order. The deadline of 16 September should allow any ratepayer to make payments by instalments of rebated rates within the prescribed arrangements.
Rebates may be granted either by a payment to the ratepayer or by reducing rates payable. Given the numbers involved it is not improbable that, because, for example, records are not completely up to date, some ratepayers may not be granted a rebate by the due date. Provision is therefore made for claims by ratepayers who have not been granted a rebate.
Rating authorities are required by 23 September 1985 to advertise in the press informing, ratepayers that they may claim rebates within 28 days of publication of the advertisement. A form of claim is contained in the schedule to the order. Rebates must be granted as soon as an application is accepted. If it is refused, the applicant has to be informed immediately in writing. If the rating authority fails to determine an application within 28 days of it being submitted, it shall be deemed to have refused the application. The ratepayer then has 28 days from a determination or deemed refusal in which to appeal against these to the sheriff. The procedure for such appeals, which was a matter of some debate when the Bill was before the House, is set out in article 7. There is also provision in article 6—which I have already mentioned—for rebate to be reassessed where values or rates are altered.
According to the latest return which COSLA has obtained from all Scottish rating authorities, some 133,000 domestic and 62,000 non-domestic, including commercial, ratepayers will qualify for rebate and the total cost of the scheme is estimated at about £30 million, which is a considerable and unprecedented figure. But the scheme is demand-led and the final cost will only be known once all rebates are settled.
As I pointed out in my opening remarks, the order applies to the current year only. Further rebate orders may be made for subsequent years. We have thought it right to go no further for the present than provision for 1985–86.

Mr. Dalyell: Has any rough estimate been made of the cost? It cannot be cheap.

Mr. Ancram: Various estimates have been made. It is thought that the cost will be under £1 million. I made it

clear when the primary legislation was passing through the House that the expenditure would be disregarded for penalty purposes in future years.
Decisions on local authority expenditure and grant are normally made in the autumn of the year preceding the financial year to which they will apply. Any extension of this rebate scheme beyond 1985–86 falls to be considered along with the other relevant matters for that year in question and most appropriately provided for at that time.

Mr. Archy Kirkwood: Can the hon. Gentleman tell the House—if not this evening, at the earliest possible opportunity—whether the provisions will continue next year? What arrangements are being made to reimburse local authorities for administering the scheme? I expected that important aspect to be covered in the hon. Gentleman's description of the order.

Mr. Ancram: I thought that I had made it clear that the cost of administering the scheme would he disregarded. That would be local authority expenditure which the local authorities would bear themselves. It would be disregarded for the purposes of guidelines. I appreciate that it is in the interests of ratepayers and others to know the intentions for the following years as soon as possible. Those decisions, and decisions on the domestic element of rate support grant, are announced and taken in the House. We hope to make those announcements in November or December this year.
The order will bring much needed relief to those ratepayers in Scotland who face greatest hardship from increases in values and in rate bills in the current year. It is a practical expression of the Government's concern. Although there will still be people who face massive rate increases, we will have met the worst of the burdens that have been created by some elements of the revaluation. That is what we undertook to do when we were passing the legislation. The process has been completed by the order, and I commend it to the House.

Mr. Jim Craigen: The Under-Secretary of State has acknowledged the assistance rendered by the Opposition during the passage of the enabling legislation. There was a problem in the commercial sector, especially for many small businesses.
The generosity of the £50 million in new money has been shown to be more apparent than real. The Under-Secretary of State referred to the order as the "last link." but there seem to be a few lost chords. A shortfall of £20 million is a considerable underestimate of the cost. By refusing to lower the threshold below the three times factor, the Government have effectively denied many ratepayers the assistance that they might have thought would be available, given the Younger declaration at Perth on 9 May. So many figures have been cited for the number of commercial and domestic ratepayers who will benefit under the order that they would have been wiser to rely on COSLA's figures, on which the Government now rest their case.
I am encouraged to look at the order by the reply that the Under-Secretary of State gave to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) in a letter on 15 July 1985, in which he said:
Now that the rebate scheme's main features have been enacted I think it would be best if we were to get on with putting it into practice.


Given the embarrassment that the order has caused, I concur with the Under-Secretary of State.
There were two significant developments in the enabling legislation—the duty imposed on a rating authority to give the rebate and the payment by the Secretary of State to the rating authority for its payments, but not the costs that it incurred in making them.
Does the Minister expect most rating authorities to make a payment or merely to deduct the amount of rebate that might be due? I ask that question because he is giving local authorities that discretion.
Will the Minister say something about some of the problems that may arise following successful appeals where the ratepayer has to pay back a rebate that he or she has been given?
Will the Minister also tell us how the order is to be uniformly advertised? He will be aware that the Scottish information office was busy at the time of revaluation trying to soothe ratepayers' anxieties about the effects of rising assessments. My hon. Friend the Member for Garscadden has elicited the fact that about £3 million of the £30 million will go to the owners of poster sites. I wonder whether Saatchi and Saatchi will be involved in the promotional aspects. Rating authorities will be advertising in the press, but ratepayers will have more general anxieties about the order.
In Tayside, for example, 7,000 lock-up garages figure among the 12,700 subjects that will benefit from the order.

Mr. Bill Walker: rose—

Mr. Craigen: I shall give way to the hon. Gentleman. He and I spent many hours together on the Rating and Valuation (Amendment) (Scotland) Act 1984. I pay full tribute to the part that he played in achieving the derating of commercial reed beds. I described it as the "Bill Walker benefit Bill." I wonder whether we are now seeing the lock-ups of Tayside coming into the same category.

Mr. Walker: The hon. Gentleman will be aware that in Tayside, especially in Angus, the revaluation has hit badly commercial premises. A substantial number of those premises will benefit from this measure. I acknowledge that lock-up garages are included. The fact that the majority of the shops, especially in Forfar, will benefit is welcome. Does the hon. Gentleman agree that the answer to the problem is to get rid of this iniquitous rating system?

Mr. Craigen: I find the hon. Gentleman's comment about Forfar interesting, because I was reading in a newspaper only the other day about the devastating effect that the problems have caused in Forfar.
I understand that one of the aspects of the rebate scheme that might disappoint many people is that domestic ratepayers may receive only a small rebate. In West Lothian 50 per cent. may receive £10 or less, and for one in three of the beneficiaries who receive more than £1 it will be in respect of lock-up garages. The Government could have assisted by lowering the threshold from the three times factor.
The Government have a duty to reimburse the payments that arise from the order, but the rating authorities are anxious about the effect that the order will have on their cash flow, especially in respect of interest charges that may be incurred. I wonder whether, in the 50 per cent.,

45 per cent., 5 per cent. arrangement that the Minister is proposing, he is giving adequate recompense to the local authorities. They will have to fork out the £1 million cost of operating the order, and also the interest charges involved.
The point made earlier by my hon. Friend the Member for Linlithgow (Mr. Dalyell) is of importance, because there is a value for money aspect. On the basis of that £1 million and the £30 million that the order will cost, we are talking about 3 per cent. for administrative and interest charges, the rating system itself collecting about £1,700 million. The Minister gave me a figure of £16 million, approximately the equivalent of 1 per cent., for the entire cost.
Will the Minister say something about the appeals procedure? There is concern among the assessors that the detailed advice that the Scottish Office finance division put out should answer many of their queries. I know, for example, that the Fife regional assessor is a little perturbed about the terms "lands" and "heritages". I believe that there have been discussions between the Scottish Office and COSLA about the matter, but the regional assessor in Fife is concerned that there are possibilities for litigation in a change of description, from, say, "store" to "warehouse". He feels that many points of litigation could arise unless the Scottish Office spells out in considerable detail some of the anxieties that can arise from the order.
The regulations are, of course, brought to us in the form that we take them or leave them, because we cannot amend them. The Government have been singularly at fault in the way that they have calculated the costs. They have been mean-minded in not agreeing to recompense the local authorities for the costs that they will incur. I hope that tonight, and in the ensuing Scottish Office circular, the Minister will clarify various points and prevent more people from feeling that they have been rather hard done by because of the way in which the order will operate.

Mr. Malcolm Bruce: I am grateful, Mr. Deputy Speaker, for the fact that I have caught your eye rather early in the debate. It is interesting to note the rather changed structure of the participants. The great bosom pals of the hon. Member for Glasgow, Garscadden (Mr. Dewar), who were backing him to the hilt in the last debate—the hon. Members for Bolsover (Mr. Skinner) for Coventry, South-East (Mr. Nellist), for Liverpool, Broadgreen (Mr. Fields) and for Sheffield, Hillsborough (Mr. Flannery)—seem to have decided that this debate has not the same interest as the previous one. In the circumstances, perhaps one can understand their choice of priorities and the issues on which they choose to intervene.

Mr. John Home Robertson: Will the hon. Gentleman give way?

Mr. Bruce: Not for the present.
The order is one which the Minister, a few months ago, might have led us to believe was the salvation of the ratepayers to Scotland, and the salvation—more to the point—of the seats of his hon. Friends. The order as it appears tonight is a long way short of that. The money that will come back to the ratepayers of Scotland now looks like being a little over half of what was originally promised.
The Government have refused to contribute to the cost of the administration of the scheme by the local


authorities, and the Minister has already told my hon. Friend that he is unable to give any kind of indication whether anything will be carried forward into next year, leaving many businesses in particular, as well as domestic ratepayers, in a position of considerable uncertainty as to whether they have real relief or just a stay of execution. The running sore of rates in Scotland is causing deep and considerable embarrassment to the Conservative and Labour parties.
In spite of its willingness to attack the Government, the Labour party is not willing to declare exactly where it stands in relation to the budget in Edinburgh, nor, indeed, where it stands on the future of the rating system. That is not surprising, because if the hon. Members for Coventry, South-East or for Liverpool, Broadgreen were here, they might say they were in favour of rates, because they recognise that the majority of Labour voters do not pay the same level of rates as the majority of voters for other parties. It is therefore a good way of buying votes on the cheap, and the Labour party has not yet come clean about where and how it will reform the voting system.

Mr. Home Robertson: The hon. Member has talked about coming clean. Has he made up his mind about how he would have voted if he had not had a fit of pique before the last Division?

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I have been listening very carefully to the debate. It is a short debate, and I remind the House that remarks should be addressed to the adequacy or otherwise of the amounts of rebates and their calculation. Hon. Members should not stray into the debate that ended an hour ago.

Mr. Bruce: I am grateful to you, Mr. Deputy Speaker. I am addressing my remarks to the inadequacy of the order.
The Government have come forward with a botched-up, temporary expedient, which has been announced in a flush of glory. When it is closely analysed, it does not live up to the spectacular announcement made in front of the television cameras at the Conservative party conference. When we get down to the nitty-gritty, we find a squalid and cheap situation, in which the Government are not prepared to give the ratepayers of Scotland the funding which they said they would give back. Nor will they give a firm commitment that such rebates will continue in the future, and that is the only solution which can help to alleviate the problems of Scotland's ratepayers.
One of the problems facing Scotland is that too many local authorities are squeezed by Government policy. Their rate support grant is cut, and that forces them to increase the rates. In addition, the revaluation effect is proving an even greater problem. The tragedy for the Government is that as a result of revaluation the public have finally discovered that the game is a bogy. The Government claim that they have the interests of ratepayers at heart, but that has been shown to be empty, shallow, and a sham. Their policies over the last five years have meant that the ratepayers of Scotland have paid, year in and year out, more and more for less and less.
This relief will not cause widespread rejoicing. It just means that ratepayers will be forced to spend more and more for still fewer and fewer services. It is no great relief to ratepayers to he told they will have to pay rate increases of 30, 40 or 50 per cent, and no great relief for them to know that they may yet have to pay rate increases of 200,

300 or 400 per cent. next year. The ratepayers of Scotland now know that, and any short-term recovery which the Government achieved by producing this deus ex machina has evaporated, as the polls in Scotland clearly show.
After the next election the Minister will not be able to hold up his head in Scotland. because he and his colleagues will be swept out of office and the city of Edinburgh will return alliance Members of Parliament. They will, of course, be drawn equally from Conservative and Labour-held seats. The Minister would be well advised to take away this squalid order and to return with one that gives to Scottish ratepayers the £50 million which the Secretary of State promised at the Conservative party conference earlier this year. If he cannot do so, I and my hon. Friends will force a Division and vote against the order.

Mr. Gordon Wilson: I shall follow the spirit of the debate and speak only briefly. Since you invited us, Mr. Deputy Speaker, to address our remarks to the method of calculation, it is strange that the Minister did not explain to the House why £20 million was missing. At the Conservative party conference, the Secretary of State promised that £50 million would be available—

Mr. Ancram: No; £40 million.

Mr. Wilson: The Minister says £40 million. but I had the impression that he promised £50 million. Even so, £40 million is still £10 million above the figure that the Minister now says will be available. It is remarkable that, after it was suggested that £50 million would be made available, only £30 million will be provided.
If the Government could convince us that this was a speculative calculation, that they had to keep the amount within the £50 million limit, and that they were not sure how much they must shell out, I could understand the need to be cautious and not to incur the wrath of the Chancellor of the Exchequer. But they have estimated that the cost of the aid will be about £30 million. If they can estimate what a multiplier of 3 will produce, surely they could adjust that multiplier so as to increase the number of people falling within the net and therefore honour the promise made by the Secretary of State.
If the Government were trying, in desperation, to attract a modicum of political support by promising this aid to ratepayers, it is strange that they have back-tracked on that promise. That sort of thing would undermine confidence in any political party. Indeed, had the Government been floating a company on the basis of that prospectus, they would have ended up in the dock because of promises made but not honoured. The entire procedure is a swindle. The only joy is that this £30 million is £30 million more than ratepayers might have received. However, that will be of no consolation to the ratepayers—including, I suspect, some hon. Members—who had hoped to benefit to a small extent, but who have discovered that they fall just short of the multiplier and will not so benefit. Tens of thousands of ratepayers will be deeply disappointed.
I cannot understand why the Government will not pay the administrative costs of the scheme. It is a simple matter. If they have so much spare cash, they should give £1 million to our hard-pressed local authorities. Indeed, it is an insult to say that local authrities will not be penalised


for implementing the Government's scheme. It was a remarkable piece of effrontery by the Minister to say that, given the small sum involved and the fact that the Chancellor had already agreed in principle to give that £1 million to local authorities.
It is deeply disappointing that the Government have not introduced a new multiplier that would reflect the need to spend the £50 million that was originally offered. Instead, they have restricted aid to £30 million and so lost much of the benefit that this move might have brought.

Mr. Tam Dalyell: My hon. Friend the Member for Falkirk, East (Mr. Ewing) and I would like clarification on one issue. We understand the Chancellor of the Exchequer to have said that this is a one-off operation, and is not to be repeated.

Mr. Ancram: indicated dissent

Mr. Dalyell: The Minister shakes his head, but I think that he had better clarify the matter, because what the Chancellor said is at odds with my understanding—and of course I will give way and be corrected—of what he said.

Mr. Ancram: I cannot, and obviously would not, without reference to reports of what the Chancellor said, try to quote him exactly. What he was saying was that new money which was available this year would not necessarily be available next year. That does not preclude this scheme being financed in other ways.

Mr. Dalyell: In what other ways?

Mr. Craigen: In the same way as the £38·5 million in regard to the Health Service.

Mr. Ancram: I have said to the hon. Member for Linlithgow (Mr. Dalyell) that these are the matters which are for consideration, and we have to consider all the decisions which we make about expenditure—in particular the matters relating to local government finance, which take place in the autumn. I am not being discourteous to the hon. Gentleman in saying that at this time of the year, before those decisions are taken and before consideration is given to the implications of them, I am not in a position to answer the question.

Mr. Dalyell: We will look forward to see what happens when autumn leaves are falling.

Mr. Craigen: I think my hon. Friend should take it that the Chancellor in effect was saying that this is an unrepeatable offer and that, if the scheme continues, it will be at the expense of the general body of ratepayers.

Mr. Dalyell: I think that we might want, as soon as Hansard is printed, to write to the Treasury and try to get a view from Treasury Ministers, because this is important.
I am not at all happy about the sheer administrative costs of this operation. If this money were available, there are certain other things in the Lothian area which ought to be done. First, I speak here as much as a Member of Parliament representing Lothian as the member for the main organising committee of the Commonwealth games. Is it understood in regard to the Royal commonwealth pool that the roofing work, unless £750,000 is spent, could become dangerous? I have checked and rechecked this. If

the money is simply not available for a basic site for the Commonwealth games, where is the money going to come from to do necessary structural roofing repairs to the Commonwealth pool?
Secondly, is it true that £130,000 is needed urgently for Meadowbank and the James Kane centre and that, if this is not done, both those places may close?
Thirdly, the Edinburgh cornmarket, which is to

Mr. Deputy Speaker: Order. I am finding great difficulty in relating this to the order.

Mr. Dalyell: I am sorry, Mr. Deputy Speaker. it is quite legitimate to talk about alternative uses of this rebate.
With regard to the Wan-ender baths, which are closed, £100,000 is urgently needed if they are to be re-opened. If they are not re-opened, training facilities for the 1986 games will be open to considerable question. This is very relevant. If the Minister cannot answer now, perhaps he could write to me about it. Paying back comparatively small sums of money with these disproportionate administrative costs is not a very sensible way of conducting our affairs.

Mr. Ancram: Many points have been raised in the debate and I shall answer as many of them as I can, beginning with those raised by the hon. Member for Linlithgow (Mr. Dalyell). The question of capital allocations for the types of subject to which he referred are also matters for consideration in the autumn, when the Government consider what allocations can be made available. We consider seriously the bids that are made and the priorities put forward by local authorities and try, within available resources, to ensure that, so far as possible, those priorities are met.
I take issue with the hon. Gentleman to the extent that he feels that the £30 million rebate, which effectively is the cost of the order, is unnecessary and unhelpful, because there are situations—hon. Members will recognise them in their constituencies—where, for instance, commercial organisations, such as small shops, might find themselves faced with rate increases, because of severe revaluations, which could put them out of business. The purpose of the order, as I have previously pointed out, is to try to mitigate the worst effects of revaluation without undoing revaluation itself.

Mr. Kirkwood: indicated assent

Mr. Ancram: The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) recognises the value of the order, because originally he asked the Government to provide £4 million or £5 million, and he sees the amounts that the Government are providing are generous. I hope, therefore, that the hon. Member for Linlithgow will reflect on some of the people whose problems and burdens will be considerably relieved by the action that will take place under the order.
The hon. Member for Dundee, East (Mr. Wilson) raised again the question of the £50 million and what he referred to as the missing £20 million and the multiplier. In fairness to my right hon. Friend, it is important to recall what he said at Perth, when he announced the sum of £40 million for commercial or non-domestic ratepayers. He referred to a scheme, the cost of which would be about—

Mr. Dewar: Not "about." but "at least."

Mr. Ancram: He may have said "at least." I do not have the exact quotation with me, and the hon. Gentleman will appreciate that I would not want to be held to a quotation without having the reference before me. It was clear from that time on that we were talking about a certain cost. That cost, on the best estimates that were available to us at the time, was £40 million for the commercials and, as we announced the following week in the House, another £10 million for the domestics. Those estimates were on the high side. We accept, as more work has been done on the valuations, that the cost will be considerably less.
The hon. Member for Dundee, East criticises the three times multiplier, but we had to take account of setting a level of multiplier at which eligibility for benefit would begin and which would not, of itself, undo revaluation completely. I am sure that he accepts, as an ex-practising solicitor—he may still be practising—who in the House has previously expressed certain expertise on valuation and admiration for revaluation, that it would not have been sensible for the Government to have undone one side of revaluation—the losing side—while leaving the other side untouched.
We had to set a level which we believed dealt with the worst effects of revaluation. It is, interestingly, a level which is below the average multiplier of revaluation in the previous revaluation. We believe that it was the right figure, and the cost, as I said works out at £30 million.

Mr. Wilson: I find the Minister's attitude somewhat ingenuous. If Ministers and the Scottish Office were successful in screwing out of the Treasury £50 million, that money should have been made available to ratepayers who are finding it extremely difficult under the three times multiplier to meet increased rate demands for which they have had no opportunity to budget. That extra money would have alleviated the distress that many people are feeling.

Mr. Ancram: The hon. Gentleman uses the rather indelicate phrase, "screwing £50 million out of the Treasury." It was not like that. The Government arrived at a scheme that involved the three times multiplier, and the cost followed that. That has been the position from the beginning, and it remains so. Opposition Members who, from the end of March and through April, were calling for sums of £4 million or £5 million, now find it difficult to accept that the Government have given a generous provision to aid ratepayers.

Mr. Craigen: rose—

Mr. Ancram: I shall give way to the hon. Gentleman, even though we have been through this so many times before.

Mr. Craigen: I have the words spoken by the Secretary of State in Perth. He said that he expected the scheme would help the 50,000 ratepayers who are most badly affected, and that it would cost £40 million. As 62,500 are to be helped over the three fold threshold, why was there that miscalculation in Perth?

Mr. Ancram: I am sure that if the hon. Gentleman talks to assessors, he will find that the analysis takes place over time, and that the evidence presented to us by COSLA, which led to us accepting that the figure would be £30 million, was not given to us until 12 June, because it was also working on the figures. The hon. Member for Glasgow, Maryhill (Mr. Craigen) has confirmed my

recollection that my right hon. Friend the Secretary of State had agreed to a scheme then and gave an estimate of the cost.
The hon. Member for Maryhill asked a number of questions. He asked about the reimbursement of rebates. We have in mind, as my right hon. Friend the Secretary of State told COSLA, that 50 per cent. of the estimated amount of rebates will be paid at the end of September. Most of the balance will be paid at the end of December, with the remaining 5 per cent. awaiting a more final figure from the authorities. That met one of the requests made to us by COSLA.
The hon. Gentleman also asked about advertising and the publicity that would be forthcoming from the Scottish Office. Again, we shall give some national publicity to the order, so that eligible ratepayers know that they need to claim, unless they have not heard from their local authority by the time that the local advertisement appears in the press, on or before 23 September. It is important that it is done that way round, because it was decided on the advice of COSLA that the order should be administered in this way.
The hon. Gentleman also asked about the sheriff court appeal and the assessors' concern. The basis of the order is comparison between old and new rateable values on the same property. It is up to local authorities, which are best placed to decide, whether the property is the same. The Scottish Office guidance circular will be discussed with COSLA before we issue it.
The hon. Gentleman asked whether the authorities would deduct the rebates from the rates or pay the rebates in cash. Some authorities advise us that they will do one thing, and others the other. It depends on their procedures. There is provision for both those procedures in the order.
Finally, the hon. Gentleman asked about the rebate payments that might have to be made after a successful appeal. After any valuation appeal is decided, some payment to or from a ratepayer has to take place. If he loses, he has to pay the 10 per cent. that he has deducted from his bill; and if he wins, the authority arranges for him to be credited or paid back. The order provides in article 6 for the revaluation rate to be recalculated, and for this recalculation to be part of the adjustment to the ratepayer's account, which will have to happen anyway. To put it more simply, it will all come out in the wash when the final adjustment is made.
The hon. Member for Gordon (Mr. Bruce) made a singularly unconstructive speech. He is obviously still labouring under the impression that giving aid to ratepayers is some form of warped priority, to use his words, on the part of the Government. It became clear that he would rather not have the order, nor the help that is being given to the ratepayers. He told us that he and his hon. Friends will vote against the order unless the three times multiplier is changed. He knows full well that that is in the primary legislation, not in the order, and is not capable of being changed tonight. It was fully debated when the primary legislation went through, and he did not vote against it then. He has shown his true colours today. He has shown, as Liberals so often do, that all they are out for is the main chance. When it becomes clear to the ratepayers of Scotland that the Liberal party was prepared today to stand up and say that it would rather that the ratepayers of Scotland did not get this £30 million, the ratepayers will be able to judge which party has their interests at heart.

Mr. Bruce: rose—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Has the Minister sat down, or is he giving way?

Mr. Ancram: I have finished, Mr. Deputy Speaker.

Question put:—

The House divided: Ayes 147, Noes 7.

Division No. 283]
[12.40 am


AYES


Amess, David
Ground, Patrick


Ancram, Michael
Hamilton, Hon A. (Epsom)


Ashby, David
Hamilton, Neil (Tatton)


Baker, Rt Hon K. (Mole Vall'y)
> Hampson, Dr Keith


Baker, Nicholas (N Dorset)
Hanley, Jeremy


Baldry, Tony
Harris, David


Batiste, Spencer
Haselhurst, Alan


Beaumont-Dark, Anthony
Hawkins, Sir Paul (SW N'folk)


Bellingham, Henry
Hawksley, Warren


Bevan, David Gilroy
Hayes, J.


Biffen, Rt Hon John
Hayward, Robert


Blackburn, John
Heathcoat-Amory, David


Boscawen, Hon Robert
Henderson, Barry


Bottomley, Peter
Hickmet, Richard


Bowden, A. (Brighton K'to'n)
Hirst, Michael


Bowden, Gerald (Dulwich)
Hogg, Hon Douglas (Gr'th'm)


Brandon-Bravo, Martin
Holt, Richard


Brinton, Tim
Howarth, Alan (Stratf'd-on-A)


Brooke, Hon Peter
Howarth, Gerald (Cannock)


Brown, M. (Brigg &amp; Cl'thpes)
Howell, Rt Hon D. (G'ldford)


Bruinvels, Peter
Hunt, David (Wirral)


Buck, Sir Antony
Hunt, John (Ravensbourne)


Burt, Alistair
Jessel, Toby


Butterfill, John
Johnson Smith, Sir Geoffrey


Cash, William
Jones, Robert (W Herts)


Chope, Christopher
Key, Robert


Clarke, Rt Hon K, (Rushcliffe)
Kilfedder, James A.


Coombs, Simon
King, Roger (B'ham N'field)


Cope, John
Knight, Greg (Derby N)


Corrie, John
Knight, Dame Jill (Edgbaston)


Couchman, James
Knowles, Michael


Cranborne, Viscount
Lamont, Norman


Currie, Mrs Edwina
Latham, Michael


Dorrell, Stephen
Lawler, Geoffrey


Douglas-Hamilton, Lord J.
Leigh, Edward (Gainsbor'gh)


Dover, Den
Lennox-Boyd, Hon Mark


Dunn, Robert
Lightbown, David


Dykes, Hugh
Lilley, Peter


Eggar, Tim
Lloyd, Peter, (Fareham)


Fairbairn, Nicholas
Luce, Richard


Fallon, Michael
Lyell, Nicholas


Farr, Sir John
McCurley, Mrs Anna


Favell, Anthony
Macfarlane, Neil


Forsyth, Michael (Stirling)
MacKay, John (Argyll &amp; Bute)


Forth, Eric
Maclean, David John


Fowler, Rt Hon Norman
Major, John


Fraser, Peter (Angus East)
Malins, Humfrey


Freeman, Roger
Mates, Michael


Gale, Roger
Mather, Carol


Galley, Roy
Maxwell-Hyslop, Robin


Gardiner, George (Reigate)
Merchant, Piers


Garel-Jones, Tristan
Meyer, Sir Anthony


Gow, Ian
Miller, Hal (B'grove)


Gregory, Conal
Mills, Iain (Meriden)


Griffiths, Peter (Portsm'th N)
Moate, Roger





Monro, Sir Hector
Rhys Williams, Sir Brandon


Montgomery, Sir Fergus
Ridley, Rt Hon Nicholas


Moore, John
Sainsbury, Hon Timothy


Moynihan, Hon C.
Shaw, Giles (Pudsey)


Murphy, Christopher
Speed, Keith


Neale, Gerrard
Stevens, Lewis (Nuneaton)


Neubert, Michael
Stewart, Andrew (Sherwood)


Newton, Tony
Taylor, Rt Hon John David


Nicholls, Patrick
Terlezki, Stefan


Normanton, Tom
Thompson, Donald (Calder V)


Norris, Steven
Thompson, Patrick (N'ich N)


Osborn, Sir John
Viggers, Peter


Page, Sir John (Harrow W)
Walden, George


Page, Richard (Herts SW)
Walker, Bill (T'side N)


Patten, Christopher (Bath)
Wardle, C. (Bexhill)


Peacock, Mrs Elizabeth
Younger, Rt Hon George


Pollock, Alexander



Portillo, Michael
Tellers for the Ayes:


Powell, William (Corby)
Mr. Ian Lang and


Raffan, Keith
Mr. Tony Durant.


Rathbone, Tim





NOES


Beith, A. J.
Steel, Rt Hon David


Bruce, Malcolm



Carlile, Alexander (Montg'y)
Tellers for the Noes:


Hughes, Simon (Southwark)
Mr. Archy Kirkwood and


Johnston, Sir Russell
Mr. James Wallace.


Livsey, Richard

Question accordingly agreed to.

Resolved,
That the Revaluation Rate Rebates (Scotland) Order 1985, dated 9th July 1985, a copy of which was laid before this House on 10th July, be approved.

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith pursuant to Standing Order No. 80(5) (Standing Committees on European Community documents).

FOODSTUFFS

That this House takes note of European Community Documents Nos. 6707/85, a proposal for a Council Directive concerning the examination of animals and fresh meat for the presence of residues, and 4793/84, a proposal for a Council Directive concerning sampling and analysis for the monitoring of foodstuffs for human consumption; and in respect of 6707/85 supports the Government's approach in seeking cost-effective arrangements which will benefit consumers and meat traders and in respect of 4793/84 supports the Government's endeavours to reach an acceptable agreement on the proposal.

FUEL

That this House takes note of European Community Documents Nos. 9153/82 and 6544/83, draft Directive and Amendment on crude oil saving through the use of substitute fuel in petrol; and Nos. 8369/83 and 7959/84, draft Directive and Amendment on rationing for commercial road transport between Member States in the case of fuel shortage; and supports the Government's intention to seek implementation of the principles contained therein.—[Mr. Peter Lloyd.]

Question agreed to.

Hospital and Welfare Services (North Down)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]

Mr. James Kilfedder: I am glad, Mr. Deputy Speaker, that I was successful in obtaining this Adjournment debate, even though it is taking place at nine minutes to 1 o'clock in the morning after a fiercely fought Scottish debate.
Over the years I have taken many opportunities to draw attention to the parsimonious attitude of the Eastern health and social services board to the hospital and welfare services in the North Down area, and I make no apology for doing so once again. However, it is necessary for me to point out that in addition to the other parts of County Down, the Eastern health and social services board also takes within its jurisdiction the whole of the city of Belfast. Throughout the years this ridiculous situation has worked to the detriment of the people in my constituency and elsewhere in County Down. If it were a parliamentary constituency, the authorities would be accused of gerrymandering, because the boundary of the Eastern health and social services board is so eccentric. It works to the disadvantage of the health of those who live outside the city of Belfast, and it works particularly to the disadvantage of those living in the North Down area—an area of ever-increasing population which has already outstripped the available hospital facilities. This is due principally to the drain of finance and resources away from North Down and into west and north Belfast, two areas of declining population.
I blame the Eastern health board and the Department of Health and Social Services for the decline in hospital facilities in the North Down area, but in fairness to both it has to be said that the former Stormont Government began the rot. Direct rule is blamed nowadays for nearly every mishap which occurs in the Province, but we must never forget that it was the former Government at Stormont who agreed that Belfast should be included in the area of the Eastern health board, with North Down, Ards, Downpatrick and other parts of County Down.
The former Stormont Government decided in the early 1970s to build the enormously expensive tower block at the city hospital in Belfast. The cost of that development escalated from £14 million to £60 million. I cannot say that all that money would have gone to the rest of the Eastern health board area if the tower block had not been built, but I am certain that substantial sums and a new hospital have been denied to the North Down area because the tower block voraciously ate up a vast amount of the money available to the Eastern health board.
The former Stormont Government also agreed vast additional capital expenditure for the upgrading of existing hospitals in west and north Belfast, where the population has been declining for years. As a result of those decisions, severe limitations were imposed on the financial resources of the Eastern health board. That is reflected in the cheeseparing of the budgets for Ards and Bangor between 1983 and 1985.
The direct treatment costs at Belfast city hospital total about 55 per cent. of all its costs—about the fifth highest proportion in the Eastern health board area. So far,

no estimate has been made of the consequences of bringing the tower block into partial use later this year and into full use next year. If the experience of other hospitals is a good guide, we can expect the direct treatment costs to increase as soon as the new building is brought into daily use. The hefty running costs of the tower block will drain more vital money away from the North Down area, which desperately needs financial help to improve the health, welfare and hospital services of local people.
The people of North Down and Ards live in the fastest growing and most urbanised area of Northern Ireland, and everyone in Northern Ireland recognises that fact. The North Down area plan envisages growth continuing well into the next century. Everyone knows that the proportion of elderly people in the area has increased and is expected to continue to increase for the next few decades.
It is common knowledge that insufficient money has been spent over many years on hospital services for the elderly. I have drawn attention many times to the failure of successive Governments to recognise what is happening to the age distribution of the population, but no action has been taken to ensure that a sensible reallocation of funds is made to take account of the situation.
A few years ago plans were announced for an extension to the geriatric unit at Crawfordsburn hospital, but nothing has been heard of that recently. The plans have been quietly pushed aside and conveniently forgotten by bureaucracy, yet the proper care of the elderly is urgently required in the North Down.
While the Government are preaching that more of the elderly should be cared for at home, the health board's officials are announcing the curtailment of meals on wheels services, the closure of day centres and the cutting of other services intended to encourage our senior citizens to remain in their own homes.
Some people have made representations, as I have, to the Government on behalf of the elderly. We should pay tribute to the contribution to the community that elderly people made over the years of their active lives. I should like to think that in their declining years others would fight their battles for them to ensure their right to a decent life and adequate provision.
I do not oppose the report of the joint review team in its entirety, as some people do. It contains a few good and sensible ideas, but it has its limitations. Some of its proposals are wholly unacceptable, such as the envisaged community hospitals to replace the existing hospitals at Bangor and Ards. During the seven years that the team took to report, millions of pounds were spent on carrying out new building programmes and on equipment in the north and west Belfast areas. Those programmes helped to consolidate the outmoded policies and thinking which had already deprived North Down of a proper hospital service.
The compiling of the report began seven long years ago. It alleges that it deals, not with the cost of hospital services, but solely with the hospital requirements for the next 20 years, and how the assessed needs can or should be met within that period, on the basis of the physical resources presently available and which can reasonably be made available.
I do not believe that the joint review team had coxed the availability of finance and general economic trends at the fore when it considered the facilities required for the area. Central to the thinking of the report is the concept of the community hospital. The fact that that concept has


not yet been fully accepted or properly thought out has not deterred the team from relying on it. I have not come across one general practitioner in North Down who sees himself helping to staff such a hospital in future. Some doctors, if they have the time available from general practice, are prepared to visit their patients in hospital, but they are not prepared to mislead their patients into believing that a community hospital with the type of profile envisaged by the joint review team report is as good as the present hospital services—bad as those facilities may be in the Bangor hospital.
One of the most valuable aspects of general practitioner services at present is home visiting by consultants. The family doctor finds that sort of support invaluable. It is available because consultants are located in the local hospitals. If changes are made and the consultants then become located in large teaching hospitals, home visiting will be continued with great reluctance. Moreover, visits to local health centres will eventually come to an end.
The financial reality is that the Bangor, Ards and Downpatrick hospitals cost considerably less than any of the hospitals in west and north Belfast. The Royal Victoria group of hospitals consistently overspends its allocation. The Mater hospital now costs more per patient than the Ulster hospital at Dundonald. The waste of money that continues at the Royal Victoria hospital can be gauged from the document entitled the "Redeployment of Resources", which was published in July 1985.
According to the report, the Royal Victoria hospital has been asked to reduce its overspending by £1·5 million. If any further proof were needed to show that the Royal Victoria is the most incompetently managed hospital in Northern Ireland, the report provides it. Yet it is the cost-effective hospitals of the North Down area that are being compelled to make yet another large saving this year, to the grave disadvantage of the people of the North Down area, who deserve better from the Eastern health and social services board.
The board has been less than honest with the report of the joint review team. It has said repeatedly that the report is not a statement of policy and that it is a consultative document only. The consultation period is stated to last until 30 September. That is what the board says, but in his latest letter to me of 5 July the Minister rather gives the game away. He says that he cannot intervene to stop the board taking irreversible decisions. It appears from his letter, however, that he is happy to accept the main thesis of the joint review team's report and that he actually supports it. I hazard a guess that since 1977 the Minister's departmental officials have been pushing that line of hospital development which the report advocates.

Mr. John David Taylor: Will the hon. Gentleman give way on that point?

Mr. Kilfedder: As I have told the Minister, I have a great deal of ground to cover.

Mr. Taylor: It is on that very point.

Mr. Kilfedder: I have told the Minister in correspondence that I do not believe that the report of the joint review team is impartial, unbiased or genuine in its examination of the hospital needs of the North Down area over the next—

Mr. Taylor: Will the hon. Gentleman give way?

Mr. Kilfedder: —20 years. I urge the Government to guarantee adequate hospital facilities at the Bangor hospital and the provision of a casualty department. It is extraordinary and unacceptable that there is no casualty department in an area with a high density population, and a population growing year by year.
I urge the Government to provide a new acute hospital in the area between Bangor and Newtownards for the people of North Down. Until such a hospital is built, I urge the Government to designate the Ulster hospital at Dundonald as the hospital for the people of Dundonald and the North Down area. That will prevent patients from being sent to the Belfast hospital, which causes even greater difficulty and stress for their relatives in their efforts to visit them.
The saddest aspect of all recent public expenditure cuts has been the shabby treatment of the elderly in our society. It is indefensible for the Eastern health and social services board to contemplate closing Crawfordsburn hospital, which provides vital geriatric beds in the area. More geriatric beds should be provided at the Ulster hospital at Dundonald, but only in addition to those provided already at the Crawfordsburn hospital.
It is lamentable that the board, which has the Government's backing, has failed to provide sufficient opportunities to give relief to unmarried daughters who have sacrificed their lives for the sake of their elderly parents, looking after the parents when they are no longer able to look after themselves. Those supportive daughters would benefit from a holiday if their relatives could make regular, short-term stays in a geriatric bed in a hospital.
The savage reduction in the home help service has meant that elderly people living on their own do not have sufficient help to enable them to manage. One of the many letters that I have received on the subject of home help and welfare provision for the elderly states:
My wife suffered a severe stroke 2 yrs. ago, she is now 75 yrs. old, she was in the hospital for a time, until she was over the worst. The stroke left her without power in her left side …
We have no home help. only a nurse coming once a week to bathe my wife … I will be 80 yrs. old next month and 3 months ago I hurt my back while attending to my wife.
That letter describes the agony and strain suffered by many people who need assistance.
The cuts in the meals on wheels services and the closure of a number of vitally needed community centres for the elderly in North Down will make life more difficult for our senior citizens, who deserve better from bureaucracy and society. One senior citizen wrote me a letter stating:
Dear Mr Kilfedder
The senior citizens of Kilcooley,"—
in my constituency in Bangor—
who attend the centre, in Carnalea Meth Church hall, have been told that the centre is closing down. They only have a few hours on Wednesday, and enjoy the activities and lunch (50p) provided. At the moment, they have a quiz going and have got into the finals and are pleased at this achievement, a simple pleasure which costs nothing, so they are to be deprived of even that
by the Eastern health board. The lady mentioned that most of the folk in the centre are in their 70s and 80s.
The public expenditure cuts have not even left out the mentally handicapped in North Down who need more money. The chairman of the Bangor and District Society for the Mentally Handicapped, Mr. Matt Murray, sent me a letter regarding the summer activities scheme at Clifton


school for the mentally handicapped at Bangor. The school was told that the health board had decided to cancel the scheme. The chairman of the health board stated:
The Board regrets any reduction in services to the mentally handicapped but, as you are aware, the Eastern Health and Social Services Board is required to make efficiency savings on an ongoing yearly basis. The Board is doing its upmost to protect priority groups like the mentally handicapped but it is not always possible for them to totally escape the effect of savings.
Eventually, as a result of offers from Barnardo's, it was possible for arrangements to be made for a shorter and less adequate period of summer help. That help is needed by parents to enable them to have a holiday during the nine weeks' summer holiday when their mentally handicapped children would normally be at home. The parents need that period of respite to renew themselves to look after their relatives.
I plead with the Under-Secretary of State to help the people of North Down. who desperately need proper hospital facilities and welfare services.

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Chris Patten): The hon. Member for North Down (Mr. Kilfedder) has covered a lot of ground. and I do not have much time in which to reply. He has dealt not only with the long-term proposals for development of hospital services in the area of the Eastern health and social services board, contained in the report of the joint review team, but with the more recent proposals of the Eastern board contained in its consultation document, "Redeployment of Resources." In both cases he has quite understandably concentrated on the effect on the North Down area, which he represents with such distinction.
The first point that I wish to make concerns the status of the different proposals. The development of hospital services in the Eastern board area is essentially a matter for consideration in the first instance by the Eastern board itself. The board is seeking to establish a pattern of hospital provision which will meet the needs of the people of its area in the years ahead, and to that end it is considering the development of hospitals throughout its area, including North Down. The JRT report deals with those long-term considerations and makes a number of recommendations. The board is consulting on those recommendations, and those consultations will continue until 30 September, after which the board will reach decisions on future hospital provision in its area.
The hon. Member referred to what I had said to him in a letter. He was selective in his quotation, because I said that where any decisions taken by the Eastern health board involved the closure or change of use of existing facilities, the formal approval of the Department of Health and Social Services would be required. Where the board decides to close a hospital, there are formal procedures that must be gone through.
Meanwhile, the board has certain financial responsibilities. In common with the other health and social services boards, it is responsible for balancing its budget, for deciding priorities and for living within the available resources. To enable it to live within its enhanced financial allocation for 1985–86, the Eastern board has decided that it needs to look for additional economies. Proposals for achieving them are contained in the document "Redeployment of Resources," and, again, comment from interested parties has been sought by 30 September 1985.

It is reasonable to consider both sets of proposals at the same time. It would have been curious had the board decided act in any other way.
I should like to deal, first, with the recommendations in the JRT report specifically—to give it its colloquial name—specifically those which affect the hon. Members constituency. In doing so, I should say once again that these are not proposals of the Eastern board; they are recommendations of the joint review team upon which the Board is currently consulting.
The review team has recommended that Ards and Bangor hospitals should cease to provide acute care and that the main specialties presently provided should transfer to the Ulster hospital at Dundonald. Both hospitals would adopt a supporting role to the Ulster hospital and fun the broad functions of community hospitals providing post-operative treatment and convalescent care. In addition, they would provide day surgery and outpatient clinics. Minor casualties would continue to be treated at Ards hospital, but all major casualties would go to the accident and emergency department at the Ulster hospital.
The hon. Member for North Down has talked about the drift of population away from Belfast to areas such as North Down and argued that as a consequence acute hospital facilities should be provided as close as possible to the areas where they are needed. I agree. It is of course. a fact that extension of the catchment population of the Ulster hospital—a point that he mentioned—to include most of the North Down and Ards local government districts is one of the recommendations of the joint review team. The Ulster hospital is accessible to the people of the North Down area. With increasing efficiency in the utilisation of available beds in other Belfast hospitals—a point he properly made—it will surely be a natural development for the Ulster hospital to take an increasing proportion of its work load from the North Down and Ards area.
On the question of geriatric provision, the hon. Member has rightly drawn attention to the importance of providing an adequate number of geriatric beds for the North Down area. In proposing that Crawfordsburn hospital should close because of its unsuitability for the care of long-stay geriatric patients, the joint review team recognised that the inpatient services currently provided there would have to be relocated at the proposed community hospitals in Newtownards and Bangor, and that capital investment might be required to provide some new accommodation for geriatric patients. That recommendation is included in the consultative process which the Eastern board is currently undertaking.
Perhaps in the two minutes that remain I can make some general observations on what the hon. Gentleman said. It is completely untrue for people to suggest that the Health Service or the personal social services in Northern Ireland in the past few years have been subjected to cuts. We have seen a real increase in expenditure on the health and personal social services of about 8 per cent. Per capita spending on the health and personal social services in Northern Ireland is 25 per cent. higher than it is in England and Wales, and in the Eastern board area it it 25 per cent. higher than the average for Northern Ireland. We have maintained capital spending in Northern Ireland over the past five years. None of that suggests cuts.
We have to make more efficient use of the money that we spend on the health services. There is at present an imbalance between acute care and community services.
We have 30 per cent. more acute care beds in Northern Ireland than on this side of the water. I am very keen to see us develop acute care facilities so that they are nearer to patients, and I am keen to see us develop the role of community hospitals.
I think that whoever stands at this Dispatch Box answering debates such as this for the next 10 years will be making much the same point—that we need to get a

better balance between acute care and community services. That is in the interests of the people of the hon. Gentleman's constituency and in the interests of people throughout Northern Ireland. I believe that even if the hon. Gentleman were making this speech—as he might perhaps one day—he would be driven to precisely the same conclusions as I have reached this evening.

Question put and agreed to.

Adjourned accordingly at twenty-one minutes past One o'clock.